Monday, July 19–Jim Wyckoff’s Morning Markets Report
Global stock markets mostly lower overnight. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. It is beginning to appear trader and investor enthusiasm may be losing some momentum at mid-summer, as the newer Covid-19 strain is surging in some regions of the world, including the U.S. Concerns about a slowing global economy combined with rising inflation may bring back into the business lexicon the term “stagflation.” That word emerged in the late 1970s amid double-digit inflation and a sputtering U.S. economy.
The key outside markets today see the U.S. dollar index higher and hitting a 3.5-month high. Meantime, Nymex crude oil prices are solidly lower, hit a four-week low and are trading around $69.80 a barrel. A surprising OPEC-plus meeting Sunday saw the cartel agree to raise its collective crude oil production by around 400,000 barrels a day each month through the endo of 2022, reports said. The 10-year U.S. Treasury note yield is presently fetching 1.255%. Bond yields are on the decline on some safe-haven buying as the global stock markets have become a bit wobbly.
U.S. economic data due for release Monday is light and includes the NAHB housing market index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are solidly lower in early U.S. trading. Bulls still have the overall near-term technical advantage. The 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 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 overnight high of 4,320.75 and then at 4,350.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,275.00 and then at 4,250.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 3.5
September Nasdaq index futures: Prices are lower in early U.S. trading. 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 the overnight high of 14,682.50 and then at 14,750.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,500.00 and then at 14,400.00. 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 solidly higher and hit a more-than five-month high in early U.S. trading. A nine-week-old price uptrend is in place on the daily chart and bulls have the solid 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 165 1/32 and then at 165 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 163 26/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
September U.S. T-Notes: Prices are higher and hit a five-month high in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at 134.08.0 and then at 134.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.26.0 and then at 133.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
EURO CURRENCY
The September Euro currency futures are lower and hit a 3.5-month low 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. 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 the overnight high of 1.1826 and then at 1.1864. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1778 and then at the March low of 1.1746. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are sharply down and hit a four-week low in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $71.00 and then at the overnight high of $71.67. Look for sell stops just below technical support at the overnight low of $69.61 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures were higher overnight. It’s “game on” again for a weather market in the grains. U.S. Midwest and northern Plains weather forecasts have turned more bullish as late-July into early August conditions in the Corn Belt are expected to be warmer and drier. The northern Plains remain scorched and the spring wheat crop is in very bad shape. Overall global supply and demand fundamentals in the grains still favor the bullish camp. On tap today is the weekly USDA export inspections report.
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