Friday, July 5–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed in quieter trading overnight. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. Look for quieter trading activity in the U.S. after the initial reaction to the U.S. jobs report’s release. Many traders and investors are still celebrating the U.S. Independence Day holiday that was on Thursday.
Traders and investors are awaiting Friday morning’s important June U.S. jobs report from the Labor Department. The key non-farm payrolls number of the report is expected to show a rise of 165,000. However, Wednesday’s weaker ADP number (up 102,000) has many thinking today’s non-farms number will also be a downside miss. A significant downside miss today would likely increase the odds for a Federal Reserve interest rate cut in July.
The key “outside markets” today see Nymex crude oil prices weaker and trading around just below $57.00 a barrel. Meantime, the U.S. dollar index is higher in early U.S. trading.
Other U.S. economic data due for release Friday includes the weekly USDA export sales report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker but hit another contract and record high overnight. Bulls have the solid overall near-term technical advantage. There are no early chart clues of a market top being close at hand. The 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 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 the overnight contract high of 3,006.00 and then at 3,025.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 2,973.75 and then at this week’s low of 2,955.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are weaker after hitting another two-month high overnight. Bulls have the solid overall near-term technical 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 contract high of 7,910.75 and then at 7,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Wednesday’s low of 7,824.50 and then at this week’s low of 7,773.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are weaker in early U.S. trading but hit a contract high overnight. Bulls have the solid overall near-term technical advantage. There are no early chart clues to suggest a market top is close at hand. 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 technical resistance is seen at the overnight contract high of 157 2/32 and then at 157 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the Wednesday’s low of 156 5/32 and then at 156 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are weaker in early U.S. trading, on a corrective pullback after hitting a contract high Wednesday. 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 neutral to bearish early today. Shorter-term support lies at 128.00.0 and then at 127.28.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the contract high of 128.14.0 and then at 128.20.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is higher and hit a two-week high in early U.S. trading. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.575 and then at 96.705. Shorter-term support is seen at the overnight low of 96.315 and then at this week’s low of 96.120. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the slight overall near-term technical advantage but have faded this week. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $57.57 and then at $58.00. Look for sell stops just below technical support at this week’s low of $56.04 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures prices closed in the overnight trade Friday, due to the U.S. Independence Day holiday Thursday. The focal point of the day will be the weekly USDA export sales report, including any significant purchases of grains by China after that nation agreed to buy more U.S. ag products. The recent losses in corn, soybeans and wheat have produced serious near-term technical damage by negating their price uptrends on the daily charts. Weather in the U.S. mid-section remains benign, which is getting a bearish slant. Still, the corn and soybean crops are off to generally late starts and need a near-perfect growing season to reach near-optimum yield potential. Trading Friday could be extra important. Historically, the first trading day for the grains after the U.S. Independence Day holiday can be pivotal. Grain price trends can be reversed or existing trends accelerate during the critical early-July timeframe. However, this may be one of those years where the trends change in the grain markets occurred just before the July Fourth holiday, instead of just afterward.
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