Tuesday, July 6–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to flat overnight. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins, with the S&P and Nasdaq poking to new record highs, following a three-day U.S. holiday weekend. Summertime, low-volatility trading doldrums may continue this week, amid notions the major central banks of the world may have to keep their money policies easier for longer following recent economic data that was not deemed robust enough to start to pull back the reins on very accommodative money policies. Traders are looking ahead to Wednesday afternoon’s release of the minutes of the June FOMC meeting. Australia’s central bank left its monetary policy unchanged at its meeting Tuesday and indicated it won’t raise interest rates before 2024.
In other overnight news, the Euro zone reported its May retail sales at up 5.6% from April and up 9.0% year-on-year. Those numbers beat market expectations.
The key outside markets early today see the U.S. dollar index slightly lower. Nymex crude oil futures are solidly higher and hit a 6.5-year high of $76.98 a barrel overnight. Energy traders are buzzing about the recently concluded OPEC meeting that ended in disagreement with no changes to oil output. That appears bullish near-term but could be bearish long-term as Saudi Arabia and the United Arab Emirates are in sharp disagreement on the UAE’s production level. Such could unravel the oil cartel down the road and lead to all-out pumping by the cartel members. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.432%. Treasury yields have been falling recently.
U.S. economic data due for release Tuesday includes the U.S. services PMI, the global services PMI, the ISM report on business services, the employment trends index and the TIPP/IBD economic optimism index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading and poked to another 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 contract high of 4,348.00 and then at 4,375.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last Friday’s low of 4,308.00 and then at 4,280.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly 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 early today. Shorter-term technical resistance is seen at the overnight contract high of 14,733.25 and then at 14,800.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,600.00 and then at 14,500.00. 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 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 to bullish early today. Shorter-term technical resistance is seen at last week’s high of 161 8/32 and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 160 19/32 and then at 160 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 higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 132.26.0 and then at 132.30.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.18.5 and then at 132.12.0. 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 lower in early U.S. trading and near last week’s three-month low. 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 early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1911 and then at 1.1950. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.1823 and then at 1.1800. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a 6.5-year high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $76.98 and then at $77.50. Look for sell stops just below technical support at the overnight low of $74.75 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures are closed overnight due to the U.S. holiday weekend. Grain market bulls have had an overall good week last week. Weather in the U.S. Corn Belt is forecast to be generally warmer and drier up to mid-July and that’s bullish. However, there are not yet any forecasts for the very bullish “heat dome” scenario over the Corn Belt. Importantly, the period right after the Fourth of July holiday can be pivotal for the grain markets. Price trends can reverse or accelerate during this critical period. Trading this week will be extra important for the grain markets.
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