Monday, July 24–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight. The very low volatility in global equity indexes continues. Such may continue to be the case until after the U.S. Labor Day holiday in early September.
Gold prices are firmer and hit a four-week high in pre-U.S. day session trading. Bulls have upside momentum to suggest more gains in the near term.
Focus of the world marketplace this week will be on the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends early Wednesday afternoon with a statement. No changes in U.S. monetary policy are expected at this meeting. However, the tone of the FOMC statement will be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U.S. monetary policy.
In overnight news, the Markit Purchasing Managers’ Index (PMI) for the Euro zone came in at 55.8 in July from 56.3 in June. The July reading was below market expectations. Still, a number above 50.0 suggests growth in the sector.
There is still lingering concern in the marketplace about the Trump Administration delivering on all of its pro-business and pro-economic-growth promises made before and just after last November’s election. Nearly six months into the Trump presidency, little has been accomplished on that front. Last week’s failure to pass new health care legislation dealt a major setback to Trump. This matter has contributed to a depreciating U.S. dollar in world currency markets.
The U.S. dollar index is slightly higher early today on a tepid corrective bounce after hitting a 14-month low overnight.
The other important “outside market” on Monday morning sees Nymex crude oil futures firmer and trading just above $46.00 a barrel. OPEC oil ministers were meeting today in St. Petersburg, Russia. Headlines are starting to show up on newswires, as OPEC ministers are commenting. However, no official statement from OPEC has been seen yet.
U.S. economic data due for release today includes the U.S. flash services PMI, the flash manufacturing PMI, and existing home sales.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly lower in early U.S. trading. Prices last week hit a contract and record high. The 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 2,476.25 and then at 2,490.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,457.75 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: 4.5
Nasdaq index September futures: Prices are slightly weaker in early U.S. trading today. Prices last Thursday hit a record high. Bulls have the solid overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the contract high of 5,938.50 and then at 5,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,900.00 and then at 5,889.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly lower on mild profit taking after hitting a three-week high on Friday. Bulls have the 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at last week’s high of 154 31/32 and then at 155 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 154 even and then at 153 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a three-week high on Friday. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 126.12.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.07.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher and did hit a 14-month low in early U.S. trading. 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 Friday’s high of 94.170 and then at 94.500. Shorter-term support is seen at the overnight low of 93.780 and then at 93.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are higher in early U.S. trading. It still appears a near-term market bottom is in place. Look for buy stops to reside just above technical resistance at $47.00 and then at last week’s high of $47.74. Look for sell stops just below technical support at the overnight low of $45.40 and then at $45.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were lower overnight. Some rainfall and cooler temps are in the forecast for the U.S. Corn Belt this week. However, the extended weather forecasts still do not look real promising for any widespread, significant rains in the Corn Belt.