Wednesday, July 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Focus at mid-week is on the Federal Reserve’s Open Market Committee (FOMC) that began meeting Tuesday to discuss U.S. monetary policy and ends this afternoon with a statement and press conference from Fed Chairman Powell. No changes in policy are expected but the Fed is expected to reiterate U.S. interest rates will remain low for a long time amid the challenges of dealing with the pandemic. As always, the FOMC statement and comments from Powell will be closely scrutinized. The Federal Reserve on Tuesday extended by three months (until December) some emergency lending programs.
U.S. stock indexes have been supported recently by corporate earnings reports that have generally beat market expectations.
Meantime, Republican senators are presently splintered regarding a new stimulus package for Americans, heading into their August recess.
The important outside markets today see Nymex crude oil prices firmer and trading around $41.50 a barrel. The U.S. dollar index is weaker. The yield on the benchmark U.S. Treasury 10-year note is currently trading around the 0.59% level.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, advance economic indicators, pending home sales, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are a bit firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a 4.5-month-old price uptrend in place. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,246.75 and then at last week’s high of 3,284.50. Buy stops likely reside just above those levels. Downside support for active traders today is seen at last week’s low of 3,191.50. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are higher in early U.S. trading. Bulls remain in firm overall technical control. However, the higher volatility at higher price levels is one clue of a topping process. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 10,758.50 and then at 10,900.00. On the downside, shorter-term support is seen at 10,500.00 and then at this week’s low of 10,401. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls still have the firm chart 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 neutral to bearish early today. Shorter-term technical resistance is seen at last week’s high of 181 30/32 and then at 182 16/32. Shorter-term support lies at this week’s low of 179 30/32 and then at 179 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls have the solid 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 neutral to bearish early today. Shorter-term resistance lies at last week’s high of 139.25.0 and then at 140.00.0. Shorter-term technical support lies at this week’s low of 139.08.0 and then at 139.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are higher and near this week’s nearly two-year high. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1794 and then at 1.1850. Shorter-term support is seen at 1.1700 and then at this week’s low of 1.1655. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are firmer in early U.S. trading. A gentle price uptrend on the daily chart has stalled out again. The shorter-term moving averages are neutral early today as the 4-day is even with 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 $41.93 and then at the July high of $42.51. Look for sell stops just below technical support at this week’s low of $40.48 and then at $40.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are mixed in early U.S. pre-market trading. Bears are having the better week, so far. Non-threatening U.S. weather and deteriorating U.S.-China trade relations are bearish. Wheat and soybeans are still in price uptrends on the daily charts, but just barely. It could be that rallies in other raw commodity markets, such as the metals, could invite some fresh speculative 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