Thursday, July 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The market place is digesting Federal Reserve Chairman Jerome Powell’s testimony to a House of Representatives committee on Wednesday. Powell leaned dovish on U.S. monetary policy by saying the Fed is still a ways off on tapering its bond-buying program (quantitative easing). He also said the U.S. central bank still believes rising inflation is only transitory. Powell speaks to a Senate committee today.
In overnight news, China’s economic growth pace slowed in the second quarter, at up 7.9%, year-on-year. That number is still strong by all standards but does hint that China’s strong economic rebound from the pandemic is leveling off. China’s GDP was up 18.3% in the first quarter. China also reported its industrial production rose a higher-than-expected 8.3% in June.
The new strain of Covid-19 continues to surge in some regions of the world, hitting Asia especially hard. This is reviving concerns that hard-hit countries’ economies will again start to suffer. This matter could put cap on global stock market rallies that have seen some major indexes hit record highs.
The key outside markets today see the U.S. dollar index slightly lower, while Nymex crude oil prices are lower and trading around $72.40 a barrel. The 10-year U.S. Treasury note yield is presently fetching 1.321%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Empire State manufacturing survey, the Philadelphia Fed business survey, import and export prices, and industrial production and capacity utilization.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading and not far below Wednesday’s contract and record high. Mild profit taking is featured. Bulls 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 contract high of 4,384.50 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,341.75 and then at 4,320.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are firmer in early U.S. trading and not far below Wednesday’s contract and record high. 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 contract and record high of 14,996.00 and then at 15,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 14,785.00 and then at 14,700.00. 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 higher in early U.S. trading. A price uptrend is in place on the daily chart and bulls have the firm overall near-term technical advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 163 20/32 and then at 164 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 25/32 and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are 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 to bullish early today. Shorter-term resistance lies at the overnight high of 133.26.0 and then at the July high of 134.03.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.15.5 and then at 133.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are slightly lower in early U.S. trading. 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 neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1864 and then at this week’s high of 1.1895. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1785 and then at 1.1750. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.96 and then at $74.00. Look for sell stops just below technical support at the overnight low of $71.68 and then at the July low of $70.76. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mostly lower overnight. Still, grain market bulls have had a good week, so far. Traders will continue to focus on U.S. Midwest and northern Plains weather forecasts, which for the Corn Belt have turned a bit more bullish as late-July into early August conditions in the Corn Belt are now expected to be warmer and drier. The northern Plains remain scorched and the spring wheat crop is in very bad shape. On tap today is the weekly USDA export sales report.
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