Wednesday, July 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. China’s stock market continues to surge following a government-owned media story telling Chinese investors it’s time to buy shares. The U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Many global stock markets have paused at mid-week following recent rallies. It could be that the alarming rise in Covid-19 cases in some countries, including the U.S., has finally dented trader and investor risk appetite. The U.S. reported a daily record of 60,000 new Covid cases on Tuesday.
Gold prices hit a nearly nine-year high overnight on safe-haven demand amid the rise in Covid-19 infections and on worries about the longer-term ramifications of central banks opening up their spigots of free-flowing cash into their financial systems. Gold bulls are reckoning the piper will be paid at some point down the road.
In other news, President Trump is now pressuring U.S. state governors to open public schools in the fall, in an effort to further reopen the U.S. economy.
The important outside markets today see Nymex crude oil prices slightly lower and trading around $40.50 a barrel. The U.S. dollar index is slightly higher early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.65% level.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report and the consumer credit report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls still have the firm 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. 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 this week’s high of 3,184.00 and then at 3,200.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 3,105.75 and then at 3,062.75. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are firmer in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at the record high of 10,694.50 and then at 10,750.00. On the downside, shorter-term support is seen at 10,500 and then at 10,400.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly 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. 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 this week’s high of 179 12/32 and then at the June high of 179 17/32. Shorter-term support lies at 179 even and then at 178 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls have the solid near-term technical advantage as prices trade sideways at higher levels. 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 resistance lies at this week’s high of 139.10.5 and then at last week’s high of 139.14.0. Shorter-term technical support lies at 139.00.0 and then at last week’s low of 138.23.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has been sideways. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1311 and then at 1.1350. Shorter-term support is seen at this week’s low of 1.1236 and then at this week’s low of 1.1200. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
August Nymex crude oil prices are slightly weaker in early U.S. trading. A gentle 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $41.08 and then at the June high of $41.63. Look for sell stops just below technical support at this week’s low of $39.84 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mostly weaker in early U.S. pre-market trading, on corrective pullbacks from recent good gains. While a weather market is still playing out in the U.S. Corn Belt, updated forecasts have backed off a bit on the heat and added some better rain chances. However, remember that weather forecasts for the U.S. Midwest in the summertime can and do change on a dime.
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