Friday, July 28–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly weaker overnight. U.S. stock indexes are also pointed to lower openings when the New York day session begins. The near-term technical postures for the U.S. stock indexes are starting to deteriorate. Bearish weekly low closes on Friday would begin to suggest the indexes have put in near-term tops.
Gold prices are trading slightly lower in pre-U.S.-session action, on a mild corrective pullback from good gains Thursday that pushed the yellow metal to a six-week high.
The marketplace is awaiting the U.S. second-quarter advance gross domestic product (GDP) report, due out at 8:30 a.m. EDT Friday morning. Forecasts are calling for GDP growth of 2.7% in 2Q, year-on-year, versus the first-quarter reading of up 1.4%.
In overnight news, the Eurozone economic sentiment index for July came in at 111.2 versus 111.1 in June. The July reading is a 10-year high. The report helped support gains in the Euro currency, which on Thursday hit a two-year high.
The U.S. dollar index is weaker in early U.S. trading Friday. The index hit a 13-month low on Thursday. The other “outside market” sees Nymex crude oil futures slightly higher. Prices Thursday hit a six-week high. Friday’s U.S. rig count number could be a market-mover for oil.
Other U.S. economic data due for release Friday includes the employment cost index and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are lower in early U.S. trading. Prices Thursday hit a contract and record high early on. Prices reversed course about midday and scored a bearish “outside day down” on the daily bar chart. If there is good follow-through selling today and prices produce a bearish weekly low close, a bearish “key reversal” down on the daily bar chart would also be confirmed. That would be a technical clue that a near-term market top is in place. The bulls right now do still 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,472.00 and then at the contract high of 2,480.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,457.00 and then at last week’s low of 2,448.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index September futures: Prices are solidly lower in early U.S. trading today. Prices Thursday hit a contract and record high early on. Prices then reversed course about midday and scored a bearish “key reversal” down on the daily bar chart, which is a technical clue that a near-term market top is in place. The bulls right now do still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 5,909.00 and then at 5,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 5,844.75 and then at 5,825.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are having the better week. Bulls do still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 152 29/32 and then at 153 13/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 152 3/32 and then at the July low of 151 18/32. 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. Bears are having the better week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 125.29.0 and then at 126.02.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 125.15.5 and then at 125.10.0. 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 weaker in early U.S. trading. Prices Thursday hit a 13-month low. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 94.115 and then at 94.500. Shorter-term support is seen at this week’s low of 93.000 and then at 92.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly firmer in early U.S. trading. Prices Thursday hit a six-week high. Prices have been trending higher for five weeks. It appears a near-term market bottom is in place. Look for buy stops to reside just above technical resistance at $50.00 and then at $51.00. Look for sell stops just below technical support at $49.00 and then at $48.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were narrowly mixed overnight. This week saw the weather market in the U.S. Corn Belt weaken, but it’s not dead yet. Weather forecasts for the region on Monday morning will be critical and are likely to cause higher price volatility on Monday.