More upbeat trader/investor attitudes at mid-week

Wednesday, July 20–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session beings. The U.S. stock index bulls are having a good week so far and have restarted near-term price uptrends on the daily charts. Corporate earnings reports are on the front burner of the stock markets this week. Otherwise, its summertime doldrums trading amid a lack of major, fresh news.

In overnight news, Russian president Putin said Russia will honor its natural gas commitments to Europe, but warned sanctions against his country could hinder natural gas movement into Europe.

Traders and investors are looking ahead to Thursday when the European Central Bank holds its regular monetary policy meeting. The ECB is expected to raise interest rates for the first time in 11 years, with many market watchers looking for a 0.5% rate increase. The U.S. Federal Reserve is expected to raise its key interest rate by at least 0.75% at next week’s FOMC meeting.

The key outside markets today see Nymex crude oil prices weaker and trading around $102.50 a barrel. The U.S. dollar index is near steady in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.971%. The 2-year and 10-year Treasury bond yields remain inverted at mid-week, which is one clue of an impending U.S. economic recession.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are slightly lower but hit a five-week high in early U.S. trading. Bears still have the overall near-term technical advantage. However, bulls have momentum and have restarted a price uptrend on the daily bar chart. 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 neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 3,964.25 and then at 4,000.00. Support for active traders is seen at 3,900.00 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 4.5

September Nasdaq index futures: Prices are a bit weaker in early U.S. trading but did hit a five-week high overnight. Prices are trending higher on the daily bar chart. 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 overnight high of 12,358.00 and then at 12,500.00. On the downside, shorter-term support is seen at 12,000.00 and then at 11,740.25. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are higher in early U.S. trading. Bears are in slight overall near-term technical control. 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 technical resistance is seen at 140 even and then at last week’s high of 140 21/32. Shorter-term support lies at this week’s low of 138 1/32 and then at 137 18/32. Wyckoff’s Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are higher in early U.S. trading. Bears are in overall near-term technical control. 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 resistance lies at Tuesday’s high of 118.15.5 and then at this week’s high of 118.29.5. Shorter-term technical support lies at the overnight low of 117.27.0 and then at 117.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The September Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 1.0317 and then at 1.0400. Shorter-term support is seen at 1.0200 and then at Tuesday’s low of 1.0165. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Nymex crude oil prices are lower in early U.S. trading. Bears have the slight near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $104.46 and then at $105.00. Look for sell stops just below technical support at $101.00 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

U.S. grain futures were mixed to firmer overnight. Bears are in near-term technical control at present. Scorching temperatures and less rainfall in the Midwest U.S. forecast for this week, but next week temps are forecast to moderate with better rain chances. However, weather forecasts in the Corn Belt in the summertime can and do flip flop fast.

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