Wednesday, July 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly weaker overnight. The U.S. stock indexes are pointed toward steady to firmer openings when the New York day session begins. The global markets are starting to pay more attention to the new Covid-19 variant that is spreading in some parts of the world, including the U.S., and is beginning to threaten some regional economies.
The market place focus today is on Federal Reserve Chairman Jerome Powell’s testimony to a House of Representatives committee today on U.S. monetary policy and the economy. Traders and investors will be closely parsing Powell’s remarks, especially any comments on inflationary pressures after the U.S. consumer price index on Tuesday was reported at up 5.4% in June, year-on-year, which is the hottest in 13 years.
Speaking of inflation, the U.S. producer price index for June is out this morning and is forecast at up 0.6% from May.
The key outside markets today see the U.S. dollar index weaker, while Nymex crude oil prices modestly lower and trading around $74.85 a barrel. The 10-year U.S. Treasury note yield is presently fetching 1.396%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage application survey, the producer price index, the weekly DOE liquid energy stocks report and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and not far below Tuesday’s contract and record high. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above 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 the contract high of 4,383.75 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,341.75 and then at 4,320.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer in early U.S. trading and not far below Tuesday’s contract and record high. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above 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 contract and record high of 14,994.75 and then at 15,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 14,785.00 and then at 14,700.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. A price uptrend is still in place on the daily chart and bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 163 7/32 and then at 163 22/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 161 6/32 and then at 161 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are firmer 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 neutral early today. Shorter-term resistance lies at 133.12.0 and then at this week’s high of 133.20.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.30.0 and then at 132.26.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading after hitting a three-month low overnight. The shorter-term moving averages for the Euro are neutral early today, as the 4-day even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1850 and then at this week’s high of 1.1895. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1785 and then at 1.1750. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 this week’s high of $75.52 and then at $76.00. Look for sell stops just below technical support at $74.00 and then at this week’s low of $73.16. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were mixed to firmer overnight. Grain market bulls have lost their weather market strength as corn and soybean crop conditions have improved markedly in the U.S. However, corn and soybean bulls have made decent recoveries from the recent lows. Spring wheat crops are still in bad shape and that could support the entire wheat market in the near term. Traders will continue to focus on weather forecasts, which are not threatening for most of the U.S. crops.
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