Wednesday, July 21–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to higher overnight. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins. At mid-week the marketplace remains concerned about the new variant of Covid-19 that is spreading and becoming increasingly worrisome—right as many North Americans and Europeans are getting ready to take family vacations and as the Olympics in Tokyo get under way. Upbeat U.S. corporate earnings reports recently have helped to calm nervous stock market investors.
The U.S. dollar index is a bit firmer and hit another 3.5-month high overnight. The USDX continues to be in a near-term price uptrend. Meantime, Nymex crude oil prices are higher on a corrective bounce after dropping sharply and hitting a five-week low on Monday, and are trading around $68.00 a barrel. Commodity market traders need to watch the crude oil market extra closely the rest of this week. If crude shows further selling pressure from Monday’s big losses, such would suggest a market top is in place. At mid-week the crude bulls appear to have stabilized the market, however. The 10-year U.S. Treasury note yield is presently fetching 1.24%.
U.S. economic data due for release Wednesday is light includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading on another corrective bounce from Monday’s steep losses. Bulls still have the 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 below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 4,350.00 and then at the contract high of 4,384.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,310.00 and then at 4,275.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below 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 this week’s high of 14,782.50 and then at 14,850.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,650.00 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 on routine profit taking after hitting a more-than five-month high on Tuesday. A nine-week-old price uptrend is still in place on the daily chart and 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 bearish early today. Shorter-term technical resistance is seen at 165 even and then at the overnight high of 165 23/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 9/32 and then at 164 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 on profit taking after hitting a five-month high on Tuesday. 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 bearish early today. Shorter-term resistance lies at the overnight high of 134.26.5 and then at 135.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134.10.5 and then at 134.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are weaker and hitting a 3.5-month low overnight. 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1838 and then at 1.1864. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1764 and then at the March low of 1.1746. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are up on short covering after hitting a six-week low on Tuesday. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $68.21 and then at $69.00. Look for sell stops just below technical support at the overnight low of $66.44 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures were mixed to firmer overnight. A weather market in the grains is back on the front burner. U.S. northwest Midwest and northern Plains weather forecasts are warmer and drier into late-July and early August. Overall global supply and demand fundamentals in the grains still favor the bullish camp. Continue to watch the crude oil market the rest of this week, as if it starts to break down again that will limit buying interest in the grains.
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