Tuesday, July 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins, on corrective bounces after suffering sharp losses on Monday. Trader and investor risk appetite is fading at mid-summer, as the newer Delta Covid-19 strain that is surging in some regions of the world, including parts of the U.S., raises concerns about a slowing global economy.
The U.S. dollar index is a bit weaker after hitting a 3.5-month high on Monday. Meantime, Nymex crude oil prices are firmer on a corrective bounce after dropping sharply and hitting a five-week low on Monday, and are trading around $66.60 a barrel. Commodity market traders need to watch the crude oil market extra closely this week. If crude shows solid follow-through selling pressure from Monday’s big losses, such would suggest a market top is in place. That would also be bad news for raw commodity market bulls. The 10-year U.S. Treasury note yield is presently fetching 1.2%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading on a corrective bounce from Monday’s steep losses. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,300.00 and then at Monday’s high of 4,320.75. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,255.00 and then at Monday’s low of 4,224.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 14,644.50 and then at Monday’s high of 14,682.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,550.00 and then at 14,500.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer and hit a more-than five-month high in early U.S. trading. A nine-week-old price uptrend is in place on the daily chart and bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 166 14/32 and then at 167 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 165 13/32 and then at 165 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher and hit a five-month high in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 135.00.0 and then at 135.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 134.20.0 and then at the overnight low of 134.14.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are near steady after hitting a 3.5-month low on Monday. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1838 and then at 1.1864. Buy stops likely reside just above those levels. Shorter-term support is seen at Monday’s low of 1.1776 and then at the March low of 1.1746. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are modestly up after dropping sharply and hitting a six-week low on Monday. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $67.29 and then at $68.00. Look for sell stops just below technical support at the overnight low of $66.13 and then at Monday’s low of $65.56. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were solidly higher overnight. A weather market in the grains is back on the front burner. U.S. Midwest and northern Plains weather forecasts are warmer and drier into late-July and early August. Overall global supply and demand fundamentals in the grains still favor the bullish camp. Watch the crude oil market, as if it starts to break down again that will limit buying interest in the grains.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff