Monday, July 6–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher in overnight trading, led by sharp gains in Chinese shares. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, with the Nasdaq index hitting another record high overnight. Once again, the surprisingly rapid recoveries in global economies from their Covid-19 beatdowns is trumping the rise in pandemic infections in many industrialized countries.
Last Friday’s solid U.S. jobs report was bolstered by a 10.4% rise in factory orders in Germany in May. Also reported Monday was the Euro zone’s retail sales for May, which rose 17.8% from April.
With summertime in full swing in the Northern Hemisphere, many traders and investors are less concerned about markets are more concerned about outdoor activities and family vacations. However, after the unofficial end of summer—the U.S. Labor Day holiday—look for focus of the markets to be on the U.S. presidential election, in which the Democratic candidate who wants to raise personal and corporate taxes is presently enjoying a comfortable lead in the polls, and how the public school systems will reopen. Those matters could be a sobering wake-up call for stock market bulls who are riding high at present.
The important outside markets today see Nymex crude oil prices slightly higher and trading around $40.75 a barrel. The U.S. dollar index is lower early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.69% level.
U.S. economic data due for release Monday includes the U.S. services purchasing managers’ index (PMI), the ISM non-manufacturing report on business, the employment trends index, and the global services PMI.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are up and hit a three-week high in early U.S. trading. Bulls have the firm 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 above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the June high of 3,220.00 and then at 3,250.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,105.75 and then at 3,062.75. Wyckoff’s Intra-day Market Rating: 6.5
September Nasdaq index futures: Prices are higher in early U.S. trading and hit a another record high overnight. Bulls remain in solid overall technical control. 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 bullish early today. Shorter-term technical resistance is seen at the overnight record high of 10,504.75 and then at 10,600.00. On the downside, shorter-term support is seen at the overnight low of 10,308.75 and then at 10,200.00. Wyckoff’s Intra-Day Market Rating: 7.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are weaker 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 178 28/32 and then at 179 even. Shorter-term support lies at last week’s low of 177 9/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls still have the solid near-term technical advantage as prices trade sideways at higher levels. 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 bearish early today. Shorter-term resistance lies at the overnight high of 139.07.5 and then at last week’s high of 139.14.0. Shorter-term technical support lies at last week’s low of 138.25.5 and then at 138.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are solidly higher in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.1320 and then at 1.1371. Shorter-term support is seen at the overnight low of 1.1236 and then at this week’s low of 1.1200. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
August Nymex crude oil prices are near steady in early U.S. trading. A price uptrend is in place on the daily chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $41.08 and then at the June high of $41.63. Look for sell stops just below technical support at the overnight low of $39.84 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are firmer in early U.S. pre-market trading. Grain market bulls are in business. A shockingly bullish USDA report on last week was the spark the bulls needed. And now a weather market is developing in the U.S. Corn Belt that could produce price uptrends in the near term. Speculators are getting more interested in the long side of the grain markets.
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