Tuesday, July 13–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins and at or near record highs. The global markets are still not paying serious attention to the new Covid-19 variant that is spreading in some parts of the world and is beginning to threaten some regional economies. Focus this week is on U.S. corporate earnings reports.
The U.S. economic data point of the day is the June consumer price index report, seen up 0.5% from May and up 5.0%, year-on-year. Some U.S. and global inflation readings have been running hot lately and a hotter U.S. CPI reading today would likely impact markets, including pushing bond yields up.
China reported surprisingly strong export data Tuesday. June exports rose 32.2% versus 27.9% in May, year-on-year and 23.0% forecast. China’s imports in June rose 36.7% versus 51.1% in May and 25% forecast.
The key outside markets today see the U.S. dollar index higher, while Nymex crude oil prices are up and trading around $74.50 a barrel. The International Energy Agency overnight warned that global oil markets are set to “tighten significantly” unless there is an increase in production. With OPEC and its allies failing to reach agreement on increased output, crude oil inventories are set to fall even more. The 10-year U.S. Treasury note yield is presently fetching 1.365%.
Other U.S. economic data due for release Tuesday includes the weekly chain store sales index and the Johnson Redbook retail report, the NFIB small business optimism index, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading after poking to a contract and record high overnight. Bulls 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 early today. Today, shorter-term technical resistance comes in at the overnight contract high of 4,378.75 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,341.75 and then at 4,320.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are up in early U.S. trading and hit a contract and record high. 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 bullish early today. Shorter-term technical resistance is seen at the overnight contract and record high of 14,927.50 and then at 15,000.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Monday’s low of 14,785.00 and then at 14,700.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly higher in early U.S. trading. A price uptrend is in place on the daily chart and bulls have the firm 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 neutral early today. Shorter-term technical resistance is seen at Monday’s high of 163 7/32 and then at 163 22/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 6/32 and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly firmer 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 neutral early today. Shorter-term resistance lies at Monday’s high of 133.20.5 and then at 133.26.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 133.08.5 and then at 133.06.5. 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 lower in early U.S. trading. 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 neutral early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1895 and then at the July high of 1.1911. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.1840 and then at the July low of 1.1797. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly up in early U.S. trading. 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 early today. Look for buy stops to reside just above technical resistance at Monday’s high of $74.93 and then at $76.00. Look for sell stops just below technical support at Monday’s low of $73.16 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures were mixed to weaker overnight. Grain market bulls have lost their weather market strength as corn and soybean crop conditions have improved markedly in the U.S. Spring wheat crops are still in bad shape and that could support the entire wheat market in the near term. Traders will continue to focus on weather forecasts, which are not threatening for most of the U.S. crops.
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