Friday, July 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins and at or very near record highs. Upbeat U.S. corporate earnings reports this week have buoyed investor hopes but Thursday’s rise in U.S. jobless claims did somewhat temper trader and investor enthusiasm. The spreading Delta variant of Covid-19 has also dampened risk appetite this week.
In overnight news, the Euro zone’s June manufacturing purchasing managers index (PMI) came in at 63.4, which was a bit better than market expectations. A reading above 50.0 suggests growth in the sector.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are weaker and trading around $71.70 a barrel. Oil prices have made a good recovery this week after falling to a five-week low on Monday. The yield on the U.S. Treasury 10-year note is presently fetching 1.3%.
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 higher in early U.S. trading and very close to the record high. 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,384.50 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Thursday’s low of 4,341.50 and then at 4,310.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher and hit a new record high in early U.S. trading. Bulls have the solid chart advantage. 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 record high of 15,015.50 and then at 15,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Thursday’s low of 14,826.75 and then at 14,700.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower on more profit taking after hitting a more-than five-month high on Tuesday. A nine-week-old price uptrend is still in place on the daily chart and bulls have the solid 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 164 12/32 and then at 165 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 163 9/32 and then at 163 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower on more profit taking after hitting a five-month high on Tuesday. 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 Thursday’s high of 134.15.0 and then at 134.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 133.26.0 and then at 133.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1842 and then at 1.1864. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1764 and then at the March low of 1.1746. 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 lower but the bulls have had a good late week. 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.11 and then at $73.00. Look for sell stops just below technical support at $71.00 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were mixed to weaker overnight. A weather market in the grains is still on the front burner. U.S. northwest Midwest and northern Plains weather forecasts are warmer and drier into late-July and early August. The question on grain traders’ minds to end the week is if the weather has now been all factored in to futures prices.
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