Thursday, July 7–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The marketplace has quickly digested Wednesday afternoon’s release of the minutes of the last FOMC meeting. The marketplaces sees a 96% chance the Federal Reserve will raise its key Fed funds rate by 75 basis points at its next FOMC meeting.
In overnight news, U.K. Prime Minister Boris Johnson said he has agreed to resign this fall, over the pandemic partying scandal.
The U.S. data point of the week is Friday’s employment situation report for June. The key non-farm payrolls number is expected to come in up 250,000 compared to the 390,000 rise in the May report.
The key outside markets today see Nymex crude oil prices firmer and trading around $99.50 a barrel. This U.S. holiday-shortened week has still seen Nymex crude fall by around $10 a barrel. The U.S. dollar index is weaker after hitting a 20-year high Wednesday. The yield on the 10-year U.S. Treasury note is fetching 2.954%. The 2-year/10-year note yield curve is presently inverted, which is one clue of impending U.S. recession.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, the monthly chain store sales index and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bears have the solid 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. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,875.00 and then at 3,900.00. Support for active traders is seen at 3,800.00 and then at last week’s low of 3,741.25. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly 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 even with the 9-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 12,000.00 and then at 12,262.00. On the downside, shorter-term support is seen at Wednesday’s low of 11,727.75 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading, on profit taking after hitting a four-week high on Wednesday. Bears are in overall near-term technical control, but bulls are working on a fledgling price uptrend on the daily chart. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 140 even and then at 141 even. Shorter-term support lies at 139 even and then at this week’s low of 138 6/32. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bears are in overall near-term technical control but bulls are working on a price uptrend on the daily chart. 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 bearish early today. Shorter-term resistance lies at the overnight high of 119.05.0 and then at 119.20.0. Shorter-term technical support lies at the overnight low of 118.15.0 and then at 118.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are up a bit after hitting a 20-year low Wednesday. Bears have the strong overall near-term technical advantage. 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.0331 and then at 1.0400. Shorter-term support is seen at this week’s low of 1.0215 and then at 1.0150. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly firmer in early U.S. trading, on a tepid rebound from strong losses posted Tuesday and Wednesday. 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 to bearish early today. Look for buy stops to reside just above technical resistance at Wednesday’s high of $102.14 and then at $105.00. Look for sell stops just below technical support at the overnight low of $96.57 and then at this week’s low of $95.10. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were solidly higher overnight as the markets posted corrective rebounds from recent strong losses. Economic recession worries and non-threatening growing weather in the U.S. Corn Belt at present have the grain market bears in near-term control. This week is historically a very important trading week in the grain futures markets. Existing price trends can be accelerated or reversed as weather patterns in early July can make dramatic shifts. So far this week the bears are winning, suggesting more price pressure in the month of July.
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