Monday, July 10–Jim Wyckoff’s morning markets report
In overnight news, China’s consumer price index for June came in at 0.0%, year-on-year, which was below market expectations for a 0.2% rise. Meantime, China’s producer price index in June fell a lower-than-expected 5.4% year-on-year, compared to a 4.6% drop in May.
The U.S. data point of the week is the consumer price index report for June, which is expected to come in at up 5.0%, year-on-year, compared to a gain of 5.3% in the May report.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are weaker and trading around $73.50 a barrel. The benchmark 10-year U.S. Treasury note yield last week moved above 4.0%, which is the highest since March. The 10-year yield is presently fetching 4.070%.
U.S. economic data due for release Monday includes the employment trends index, monthly wholesale trade and consumer credit. Several Federal Reserve Board officials are also scheduled to give speeches today.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading. Bulls still have the solid overall near-term technical advantage. However, more selling pressure this week would raise the specter of a bearish double-top reversal pattern forming on the daily bar chart. The 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 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 Friday’s high of 4,476.00 and then at the June high of 4,498.00. Support for active traders is seen at 4,400.00 and then at 4,368.50. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly weaker in early U.S. trading. Bulls still have the solid near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the June high of 15,475.50 and then at 15,600.00. On the downside, shorter-term support is seen at 15,000.00 and then at 14,853.50. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower and hit a contract low in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9- 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 Friday’s high of 124 15/32 and then at 125 even. Shorter-term support lies at 123 even and then at 122 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at Friday’s high of 111.00.0 and then at 111.10.0. Shorter-term technical support is seen at the contract low of 110.05.0 and then at 110.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are slightly lower in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1022 and then at the June high of 1.1061. Shorter-term support is seen at 1.0950 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
August Nymex crude oil prices are weaker but hit a five-week high in overnight trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above 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 the overnight high of $74.00 and then at $75.00. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were higher overnight. On tap today is the weekly USDA export inspections report. The corn market is still bearish, soybeans bullish and wheat neutral to bearish. These divergences in technical postures for the grains are uncommon. Don’t look for them to last too long. Weather forecasts for the U.S. Midwest have turned wetter but there are still some dry pockets in the Corn Belt.
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