Thursday, July 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. The U.S. stock indexes are pointed toward higher openings when the New York day session begins, with the Nasdaq index hitting a record high overnight. Recent U.S. and global economic data suggests businesses’ recoveries from the Covid-19 pandemic damage to them is more rapid than initially expected. Also, the Federal Reserve’s FOMC minutes released Wednesday afternoon reiterated the Fed will likely continue to work to stimulate the U.S. economy through monetary policy measures. These bullish elements are for now outweighing the bearish specter of a Covid-19 resurgence in many U.S. states that is forcing some of those states to again shut down some of their businesses. However, there are fresh reports that a vaccine for the infection is showing promise.
It’s a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. Some U.S. markets will close early today. However, today will be another very busy for U.S. economic data releases that are likely to move markets. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%. Other important U.S. economic reports out on Thursday include weekly jobless claims, the international trade report, the ISM New York report on business, and manufacturers’ shipments and inventories.
In overnight news, the Euro zone’s unemployment rate up-ticked a bit in May, to 7.4% from 7.3% in April. The region’s producer price index was also released and came in down 0.6% in May and down 5% year-on-year.
The important outside markets today see Nymex crude oil prices higher and trading around $40.00 a barrel. The U.S. dollar index is weaker early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are modestly up in early U.S. trading. Bulls have the overall near-term technical advantage and are having a good week. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,130.75 and then at 3,156.25. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Wednesday’s low of 3,062.75 and then at 3,030.25. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are firmer in early U.S. trading and hit another record high overnight. Bulls remain in solid overall technical control. 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 bullish early today. Shorter-term technical resistance is seen at the overnight record high of 10,335.75 and then at 10,500.00. On the downside, shorter-term support is seen at the overnight low of 10,246.50 and then at Wednesday’s low of 10,076.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are still 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 Wednesday’s high of 178 16/32 and then at 179 even. Shorter-term support lies at this week’s low of 177 15/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up in early U.S. trading. Bulls still have the solid near-term technical advantage as prices trade sideways at higher levels. 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 resistance lies at Wednesday’s high of 139.05.5 and then at this week’s high of 139.14.0. Shorter-term technical support lies at this week’s low of 138.25.5 and then at 138.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are solidly higher in early U.S. trading. Bulls have the slight overall near-term technical advantage. 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 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 1.1320 and then at 1.1371. Shorter-term support is seen at the overnight low of 1.1254 and then at this week’s low of 1.1202. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are firmer in early U.S. trading. A price uptrend is in place on the daily chart. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $40.58 and then at $41.00. Look for sell stops just below technical support at the overnight low of $39.46 and then at $39.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
US grain futures are mixed but mostly higher in early U.S. pre-market trading. Grain market bulls have surprisingly sprung back to life this week. A shockingly bullish USDA report on Tuesday is the spark the bulls needed. And now a weather market is developing in the U.S. Corn Belt that could produce price uptrends in the near term. The big speculative “funds” were caught heavily short the grains and are now being forced to cover those short positions (short covering).
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