Tuesday, July 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. China’s shares remain under pressure on the prospect of great government oversight of some companies. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins but still near their record highs. Overall risk sentiment remains upbeat at present, despite some worries about the pandemic flaring up in some countries, including the U.S. Solid corporate earnings reports are keeping equities prices elevated.
In focus now is the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) that begins Tuesday morning and ends Wednesday afternoon with a statement. Inflation and economic growth prospects will be the hot topics traders and investors want to see the FOMC meeting address. Some market watchers are buzzing about the prospects of slower U.S./global economic growth and rising inflation, which in the past has been called stagflation. The conclusion of the meeting Wednesday afternoon, including Fed Chairman Jay Powell’s press conference, is likely to cause some market gyrations.
The marketplace is watching a meeting between U.S. and China officials this week, with indications that the two nations remain wary of each other.
The key outside markets today see the U.S. dollar a bit firmer. Nymex crude oil futures prices are near steady and trading around $72.00 a barrel. The yield on the U.S. Treasury 10-year note is presently fetching 1.25%.
U.S. economic data due for release Tuesday includes the weekly chain store sales index and the Johnson Redbook retail report, durable goods orders, the monthly house price index, the Case-Shiller home price index, the Richmond Fed business survey and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are a bit weaker in early U.S. trading and not far below Monday’s 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 4,416.75 and then at 4,435.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,375.50 and then at 4,350.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly weaker after hitting a new record high Monday. Bulls have the solid chart advantage. 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 record high of 15,134.00 and then at 15,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Monday’s low of 15,038.75 and then at 14,900.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. A 10-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 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 Monday’s high of 165 12/32 and then at 166 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 163 24/32 and then at last week’s low of 163 9/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Prices are in a 10-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 Monday’s high of 134.19.0 and then at 134.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 134.02.0 and then at 133.27.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bears have the firm 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 early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1828 and then at last week’s high of 1.1842. Buy stops likely reside just above those levels. Shorter-term support is seen at the July low of 1.1764 and then at the March low of 1.1746. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $72.43 and then at $73.00. Look for sell stops just below technical support at Monday’s low of $70.56 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were mostly higher overnight. It’s going to be a scorcher in much of the Corn Belt later this week and that has the bulls in charge today. Grain market bulls still have the overall near-term technical advantage. Traders in the near term will continue to focus mainly on U.S. weather patterns in the Corn Belt and northern Plains.
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