Thursday, July 1–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed toward narrowly mixed openings to start the third quarter when the New York day session begins. Lazy summertime trading continues in the world equity markets, amid no major geopolitical flare-ups and generally upbeat trader and investor attitudes. Traders and investors are so far not paying much attention to the delta strain of the Covid-19 virus that is becoming more problematic in Asian countries and other regions of the world.
In overnight news, the June Euro zone manufacturing purchasing managers index (PMI) was reported at 63.4 compared to 63.1 in May. A reading above 50.0 suggests growth in the sector.
Meantime, the Euro zone jobless rate in May was 7.9% versus 8.1% in April.
Traders are awaiting Friday morning’s employment situation report for June from the Labor Department—arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 700,000 compared to a rise of 559,000 in May. The unemployment rate is seen at 5.6% versus 5.8% in May.
The key outside markets today see the U.S. dollar index slightly higher and hitting a 2.5-month high overnight. Nymex crude oil futures are higher and trading around $74.75 a barrel after hitting a 2.5-year high of $74.90 overnight. Energy traders are awaiting the conclusion of Thursday’s OPEC meeting. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.473%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the U.S. manufacturing PMI, the ISM report on business manufacturing, construction spending, and the global manufacturing PMI.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading and hit another contract and record high overnight. Bulls 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 4,305.75 and then at 4,330.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,287.00 and then at 4,258.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are weaker in early U.S. trading and poked to another contract and record high overnight. 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 bearish early today. Shorter-term technical resistance is seen at the contract high of 14,606.25 and then at 14,700.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,400.00 and then at this week’s low of 14,333.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. A price uptrend is still in place on the daily chart and 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 160 12/32 and then at this week’s high of 160 31/32. Buy stops likely reside just above those levels. Shorter-term support lies at 160 even and then at 159 15/32. 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. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 132.12.0 and then at this week’s high of 132.18.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Wednesday’s low of 132.06.0 and then at 132.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are a bit firmer in early U.S. trading after hitting a 2.5-month low overnight. 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 to bullish early today. The Euro currency finds shorter-term technical resistance at 1.1900 and then at this week’s high of 1.1963. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1854 and then at 1.1800. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading and hit a 2.5-year high of $75.15. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $76.00 and then at $77.00. Look for sell stops just below technical support at $74.00 and then at the overnight low of $73.39. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures are higher to solidly higher in early U.S. pre-market trading, on good follow-through buying after Wednesday’s sharp to limit-up price gains. Grain market bulls are getting a double-barrel blast of generally bullish USDA reports out Wednesday and weather in the U.S. Corn Belt turning warmer and drier as July gets under way. High daily volatility in the grain futures markets is back.
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