Friday, July 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to flat overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session beings, on corrective pullbacks and pauses after a week of good gains. The U.S. stock index bulls have started near-term price uptrends on the daily bar charts.
In overnight news, the Euro zone July manufacturing purchasing managers index (PMI) came in at 49.6 compared to expectations for a reading of 51.0. A reading below 50.0 suggests contraction in the sector. The July services PMI came in at 50.6 compared to a forecast of 52.0.
The key outside markets today see Nymex crude oil prices down and trading around $95.00 a barrel. The U.S. dollar index is slightly up in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.823%.
U.S. economic data due for release Friday includes the U.S. flash services and manufacturing purchasing managers indexes.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. Bulls have started a price uptrend on the daily bar chart. 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 to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,004.75 and then at 4,050.00. Support for active traders is seen at Thursday’s low of 3,930.25 and then at 3,900.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading. Prices are trending higher on the daily bar chart and bulls and bears are on a level overall near-term technical playing field. 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 this week’s high of 12,655.25 and then at 12,800.00. On the downside, shorter-term support is seen at Thursday’s low of 12,373.50 and then at 12,200.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are solidly higher in early U.S. trading. Bulls have momentum. 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 July high of 142 6/32 and then at 143 even. Shorter-term support lies at the overnight low of 140 14/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 6.5
September U.S. T-Notes: Prices are solidly higher in early U.S. trading. Bulls have momentum now. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 119.24.0 and then at 120.00.0. Shorter-term technical support lies at 119.10.0 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The September Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 this week’s high of 1.0320 and then at 1.0400. Shorter-term support is seen at this week’s low of 1.0125 and then at 1.0100. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bears have the near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $97.95 and then at $100.00. Look for sell stops just below technical support at $94.00 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were lower overnight, led by wheat, on news that Russia will allow Ukrainian grain shipments out of the Black Sea region. Grain market bears are in near-term technical control at present. Scorching temperatures in the Midwest U.S. are forecast for Saturday, but next week temps are forecast to significantly moderate with better rain chances. The window is closing for a serious weather market scare in the corn market. Soybeans do not see the critical growing period until August.
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