Tuesday, August 1–Jim Wyckoff’s morning markets report
Trading may remain more subdued this week, ahead of the U.S. data point of the week on Friday: the U.S. employment situation report for July. The key non-farm payrolls number is expected to come in at up 200,000 jobs, compared to a rise of 209,000 in the June report.
In overnight news, the Euro zone July manufacturing purchasing managers index (PMI) came in at 42.7 versus the June reading of 43.4. The July reading was right in line with market expectations. A number below 50.0 suggests contraction in the sector.
In other news, the World Gold Council said global demand for gold fell 2% in the second quarter, to 921 metric tons, due to higher interest rates and a stronger U.S. economy that has kept the Federal Reserve hawkish this year. However, central bank demand for gold hit a record high in the first half of 2023, at 387 metric tons, said the WGC.
The Royal Bank of Australia left its interest rates unchanged at its policy meeting Tuesday, but said further policy tightening may be required. The RBA said inflation is declining but is still too high.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, construction spending, the global manufacturing PMI and domestic auto industry sales.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls have the solid overall near-term technical advantage as prices hover near the high for the year. The 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 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 July high of 4,634.50 and then at 4,675.00. Support for active traders is seen at last week’s low of 4,553.75 and then at 4,525.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly down in early U.S. trading. Bulls have the solid 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. 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 this week’s high of 15,917.00 and then at the July high of 16,062.75. On the downside, shorter-term support is seen at 15,650.00 and then at last week’s low of 15,483.75. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: 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 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 last Friday’s high of 124 21/32 and then at 125 even. Shorter-term support lies at this week’s low of 123 26/32 and then at last week’s low of 123 9/32. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are slightly down 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at this week’s high of 111.20.0 and then at 112.00.0. Shorter-term technical support is seen at last week’s low of 110.25.5 and then at 110.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are weaker 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1072 and then at 1.1100. Shorter-term support is seen at the overnight low of 1.0991 and then at last week’s low of 1.0970. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading. 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 neutral early today. Look for buy stops to reside just above technical resistance at Monday’s high of $82.00 and then at $83.00. Look for sell stops just below technical support at Monday’s low of $80.13 and then at $78.29. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed in overnight trading. Bulls have faded badly with Monday’s steep losses. Weather forecasts for the Midwest are not bullish early this week. Cooler temps and better rainfall chances are expected the next several days. There is also talk that Ukraine grain may be able to be successfully shipped to the world through land routes in Europe.
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