Friday, July 28–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock indexes are at or near their highs for the year amid a summertime rally.
Traders are awaiting some more U.S. inflation data today, as the personal consumption expenditures (PCE) component of the personal income and outlays report will be closely scrutinized. The June PCE core index is seen coming in up 4.2%, year-on-year, versus a reading of up 4.6% in the May report.
In overnight news, the Bank of Japan made a surprise move that the global marketplace noticed. The BOJ made no interest rate change but it did say it will allow Japanese 10-year government bond (JGB) yields to be more “flexible” (meaning allowing yields to rise). That’s significant because the BOJ has been a last bastion for major central banks with ultra-low interest rates. The new BOJ stance on its yield-curve range hints to the marketplace that Japanese investors, who have been big holders of U.S. Treasuries, may now move more toward the JGBs and their potentially higher yields, and away from U.S. Treasuries. The Japanese yen rallied on the news.
U.S. economic data due for release Friday includes personal income and outlays, the employment cost index and the University of Michigan consumer sentiment survey.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. 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. 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 4,600.00 and then at this week’s high of 4,634.50. Support for active traders is seen at this week’s low of 4,553.75 and then at 4,525.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the solid near-term technical 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 neutral early today. Shorter-term technical resistance is seen at this week’s high of 15,904.00 and then at the July high of 16,062.75. On the downside, shorter-term support is seen at this week’s low of 15,483.75 and then at 15,350.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading after hitting a three-week low overnight. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 125 even and then at 126 even. Shorter-term support lies at the overnight low of 123 9/32 and then at the July low of 122 30/32. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher in early U.S. trading after hitting a three-week low overnight. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 112.00.0 and then at Thursday’s high of 112.07.0. Shorter-term technical support is seen at the overnight low of 110.25.5 and then at 110.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading after hitting a three-week low overnight. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1100 and then at this week’s high of 1.1177. Shorter-term support is seen at the overnight low of 1.0970 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading on mild profit taking after hitting a three-month high Thursday. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $80.60 and then at the April high of $81.44. Look for sell stops just below technical support at Thursday’s low of $78.87 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were lower in overnight trading. While weather in the Midwest still leans bullish, with hot temps and light precipitation late this week, there is talk that Ukraine grain may be able to be successfully shipped to the world through land routes in Europe. This follows Russia’s cancellation of a grain-shipping deal with Ukraine and Russia’s attacks on Ukraine grain facilities. Technicals are fully bullish for soybeans and modestly bullish for corn and wheat futures.
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