Friday, July 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were flat to narrowly mixed overnight. The U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, in typically subdued summertime trading. While the Nasdaq and S&P stock indexes have hit record highs this week, it appears trader and investor enthusiasm may be losing momentum as the new Covid-19 strain is surging in regions of the world, including the U.S. Just when it appeared the pandemic was being tamped down in much of the world, it is flaring up again.
The U.S. data point of the day Friday is the retail sales report for June, seen down 0.4% from May and compares to a decline of 1.3% in May from April.
In other news, the Biden administration is warning U.S. businesses about operating in Hong Kong, amid mainland China’s tightening grip on the city.
Overnight, the Euro zone June consumer price index was reported up 0.3% from May and up 1.9%, year-on-year. Those numbers were in line with market expectations and much tamer than this week’s U.S. consumer price index numbers.
The key outside markets today see the U.S. dollar index slightly lower, while Nymex crude oil prices are firmer and trading around $72.00 a barrel. The 10-year U.S. Treasury note yield is presently fetching 1.324%.
Other U.S. economic data due for release Friday includes manufacturing and trade inventories, Treasury international capital data and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and not far below this week’s contract and 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 4,384.50 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,332.50 and then at 4,300.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer in early U.S. trading and not far below this week’s contract and record high. 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 and record high of 14,996.00 and then at 15,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 14,708.25 and then at 14,600.00. Sell stops likely reside just below those levels. 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. A price uptrend is in place on the daily chart and bulls have the firm overall near-term technical advantage. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 164 even and then at the July high of 164 30/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 162 25/32 and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. 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 to bearish early today. Shorter-term resistance lies at this week’s high of 133.28.0 and then at the July high of 134.03.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 133.14.0 and then at 133.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are slightly lower in early U.S. trading. 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 Thursday’s high of 1.1864 and then at this week’s high of 1.1895. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1785 and then at 1.1750. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly up in early U.S. trading. 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 Thursday’s high of $72.96 and then at $74.00. Look for sell stops just below technical support at the overnight low of $71.13 and then at the July low of $70.76. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures were firmer overnight. Grain market bulls have had a good week. Traders will continue to focus on U.S. Midwest and northern Plains weather forecasts, which for the Corn Belt have turned more bullish as late-July into early August conditions in the Corn Belt are expected to be warmer and drier. The northern Plains remain scorched and the spring wheat crop is in very bad shape. Overall global supply and demand fundamentals in the grains still favor the bullish camp.
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