Monday, July 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. World trade tensions remain high, which is causing some anxiety in the market place again to start the trading week and the trading quarter.
U.S. President Trump is now focusing on auto imports into the U.S. for tariffs. The already-tense trade relations between the U.S. and the other major economies of the world appear to have ratcheted up another notch.
Some political fighting in Germany, regarding that country’s immigration laws, is a bit negative for the Euro currency early this week.
In other overnight news, the Euro zone unemployment rate was reported at 8.4% in May, which was unchanged from June. The Euro zone manufacturing purchasing managers’ index (PMI) came in at 54.9 in June, which was just slightly below market expectations. A reading above 50.0 suggests growth in the sector.
It could be a quieter trading week this week, as Canadian markets are closed today for Canada Day and the U.S. Independence Day holiday is on Wednesday. However, some important U.S. economic data is out later this week, including the Fed’s FOMC minutes on Thursday and the jobs report on Friday.
The key “outside markets” today find the U.S. dollar index higher. Meantime, Nymex crude oil prices are modestly lower and trading just below $74.00 a barrel.
U.S. economic data due for release Monday includes the U.S. manufacturing PMI, construction spending, the global manufacturing PMI, and the ISM manufacturing report on business.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading. The bulls have the slight overall near-term technical advantage, but prices have been trending lower for two weeks. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,728.00 and then at Friday’s high of 2,745.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,700.50 and then at 2,679.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index December futures: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 7,088.00 and then at 7,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,992.25 and then at last week’s low of 6,956.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at last week’s high of 145 16/32 and then at the May high of 145 28/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 144 25/32 and then at 144 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher 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 to bullish early today. Shorter-term resistance lies at last week’s high of 120.14.5 and then at 120.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.03.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 95.000 and then at the contract high of 95.255. Shorter-term support is seen at the overnight low of 94.260 and then at 94.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August 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 with 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 last week’s high of $74.03 and then at $75.00. Look for sell stops just below technical support at the overnight low of $72.51 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were steady to higher overnight on short covering. Bears are still in technical command. World ag trade worries and generally good growing weather in the U.S. Corn Belt remain bearish. Hotter weather is coming for the region the next few days, but traders are not worried about that. It’s going to take a weather market scare to jump-start rallies in the stumbling grain markets.