Friday, July 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. The news on the delta variant of the coronavirus just keeps getting worse and that is starting to unnerve more and more traders and investors. China’s crackdown on Hong Kong protesters and some of its tech companies, as well as some big U.S. companies reporting misses on earnings this week are also giving the bulls pause as the calendar turns to August—typically a month of lower trading volumes as families take vacations before school starts. Friday is the last trading day of the week and of the month, making it an extra important trading day from a technical perspective.
In overnight news, the Euro zone’s July consumer price index came in at up 2.2%, year-on-year, compared to a rise of 1.9% in June and a forecast for up 2.0%. The July rise in CPI does not suggest problematic price inflation.
The key outside markets today see the U.S. dollar index a bit firmer on a corrective rebound from solid selling pressure seen this week that drove the index to a four-week low overnight. Nymex crude oil futures prices are slightly down and trading around $73.25 a barrel. The yield on the U.S. Treasury 10-year note is presently fetching 1.24%.
U.S. economic data due for release Friday includes personal income and outlays, the employment cost index, the Chicago ISM business survey, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading on profit taking from recent gains. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,400.00 and then at the contract high of 4,416.75. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,364.75 and then at 4,340.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are lower in early U.S. trading on profit taking. Bulls still have the solid chart advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below 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 15,000.00 and then at the record high of 15,134.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 14,774.25 and then at 14,700.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading. A 10-week-old price uptrend is in place on the daily chart and bulls still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 165 even and then at this week’s high of 165 12/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 164 3/32 and then at this week’s low of 163 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Prices are in a 10-week-old uptrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bullish 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 early today. Shorter-term resistance lies at this week’s high of 134.19.0 and then at 134.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 134.02.0 and then at 133.27.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are higher and hit a four-week high in early U.S. trading. While bears still have the overall near-term technical advantage, the bulls are having a good week and have momentum. A price downtrend on the daily bar chart has been negated this week. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1919 and then at 1.1950. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1885 and then at Thursday’s low of 1.1851. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are a bit weaker in early U.S. trading. 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 $73.68 and then at $74.00. Look for sell stops just below technical support at $72.93 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were lower overnight. Some risk aversion in the marketplace to end the trading week is limiting buying interest in the grains. Grain market watchers are wondering if the bullish weather news has now been fully factored into prices. Hot and mostly dry weather in the western Corn Belt remains bullish, but the rest of the Corn Belt sees much better growing conditions. Grain market bulls still have the overall near-term technical advantage.
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