Wednesday, July 13–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher lower openings on tepid corrective bounces from this week’s selling pressure. The U.S. data point of the week, if not the month, will be Wednesday morning’s consumer price index report for June, which is seen coming in hot at up 8.5%, year-on-year. In the May report, CPI was up 8.6% annually.
Traders are still buzzing about Tuesday’s big downdraft in crude oil futures prices, with Nymex futures falling to a 2.5-month low of $93.67 overnight. Crude’s plunge pulled other major commodity market prices down, too. The weakening raw commodity sector is an early clue that inflationary pressures may have peaked.
In other overnight news, China’s exports rose in June by 17.9%, year-on-year, which was above market expectations. However, imports rose only 1.0% in the same period. Analysts expect China’s second-quarter GDP to be up only 0.9%, compared to a rise of 4.8% in the first quarter.
The key outside markets today see Nymex crude oil prices firmer on a corrective bounce after Tuesday’s strong losses, and trading around $96.50 a barrel. The U.S. dollar index is down after hitting after hitting a 20-year high Tuesday. The yield on the 10-year U.S. Treasury note is fetching 2.972%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the weekly DOE liquid energy stocks report, the monthly Treasury budget statement and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bears have the firm 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 3,922.00 and then at 3,950.00. Support for active traders is seen at 3,800.00 and then at the July low of 3,744.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 early today. Shorter-term technical resistance is seen at 12,000.00 and then at last week’s high of 12,211.00. On the downside, shorter-term support is seen at this week’s low of 11,712.00 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bears are still in overall near-term technical control. 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 this week’s high of 140 12/32 and then at the July high of 142 6/32. Shorter-term support lies at 139 even and then at 138 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bears are in overall near-term technical control. 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 resistance lies at this week’s high of 119.03.0 and then at 119.10.0. Shorter-term technical support lies at the overnight low of 118.13.5 and then at 118.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading. Bears have the strong overall near-term technical advantage. 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.0150 and then at 1.0200. Shorter-term support is seen at this week’s low of 1.0048 and then at 1.0000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are firmer in early U.S. trading after hitting a 2.5-month low overnight. Bears have the near-term technical advantage. 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 neutral early today. Look for buy stops to reside just above technical resistance at $98.00 and then at $100.00. Look for sell stops just below technical support at $95.00 and then at the overnight low of $93.67. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed overnight. Bears are again in firm near-term technical control after Tuesday’s major losses. There was a “flash” weather market in the grains that lasted only two trading sessions. Attention remains on weather forecasts for the Corn Belt, which are now for mostly warmer and drier conditions the next two weeks, but with scattered rain chances. Traders are reading that as being benign for the grain markets, at present. But remember that Corn Belt weather in the summertime can “change on a dime.”
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