Tuesday, July 3–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
European stock markets were assuaged today on news that German Chancellor Merkel has apparently avoided a political crisis by coming to agreement with other German lawmakers regarding immigration laws.
In other overnight news, the Euro zone’s producer price index in May was reported up 0.8% from April and up 3.0%, year-on-year. Those numbers were a little higher than expected.
The U.S. Independence Day holiday is on Wednesday, which is likely to make trading in the U.S. light today, especially as many markets close early today. However, some important U.S. economic data is out later this week, including the Fed’s FOMC minutes on Thursday and the jobs report from the Labor Department on Friday.
Reports overnight said Monday’s trading in gold exchange traded funds saw the largest outflow of money from those funds since late March. Gold and silver bulls remain stymied by their metals’ inability to rally in the face of the threat of a global trade war and some fresh instability in the European Union.
The key “outside markets” today find the U.S. dollar index lower but still not far below the 12-month high hit last week. Meantime, Nymex crude oil prices are higher, hit a 3.5-year high and trading just below $75.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, manufacturers’ shipments and inventories, the IDB/TIPP economic optimism index and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. The bulls have the slight overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are still 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 bullish early today. Today, shorter-term technical resistance comes in at 2,750.00 and then at 2,765.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,720.50 and then at last week’s low of 2,700.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index December futures: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are still 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 bullish early today. Shorter-term technical resistance is seen at 7,175.00 and then at 7,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,100.00 and then at 7,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 144 29/32 and then at last week’s high of 145 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 144 even and then at 143 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are still 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 120.06.0 and then at last week’s high of 120.14.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.24.0 and then at 119.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is lower in early U.S. trading. Bulls still 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.730 and then at 95.000. Shorter-term support is seen at 94.195 and then at 94.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
August Nymex crude oil prices are higher and hit a 3.5-year high 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 bullish early today. Look for buy stops to reside just above technical resistance at $75.00 and then at $76.00. Look for sell stops just below technical support at the overnight low of $73.92 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
Grain futures were higher overnight on short covering and perceived bargain hunting after hitting new for-the-move lows on Monday. 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 along with some rain so traders are not worried about that. It’s going to take a mid- or late-summer weather market scare to jump-start rallies in the stumbling grain markets.