Tuesday, July 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly up and European shares mostly down. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Recession and inflation worries are still tamping down trader and investor risk appetite.
In overnight news, the U.S. as soon as this week may start to roll back some U.S. tariffs on Chinese imports, which were imposed by the Trump administration. The move would be an attempt by the Biden administration to alleviate inflation/recession concerns.
The U.S. data point of the week is Friday’s employment situation report for June. The key non-farm payrolls number is expected to come in up 250,000 compared to the 390,000 rise in the May report.
The key outside markets today see Nymex crude oil prices weaker and trading around $108.30 a barrel. The U.S. dollar index is sharply higher and hit a 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.891%. Recent falling U.S. Treasury yields are one early clue that U.S. inflation may have peaked.
U.S. economic data due for release Tuesday includes manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The 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 is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,857.75 and then at 3,900.00. Support for active traders is seen at last week’s low of 3,741.25 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading. 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 even with the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,749.00 and then at 12,000.00. On the downside, shorter-term support is seen at last week’s low of 11,351.00 and then at the June low of 11,068.50. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are a bit weaker in early U.S. trading on a mild pullback after hitting a four-week high last Friday. Bears are still in overall near-term technical control, but bulls are working on a fledgling price uptrend on the daily chart. 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 technical resistance is seen at the overnight high of 139 27/32 and then at 140 even. Shorter-term support lies at the overnight low of 138 6/32 and then at 138 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading. Bears are in overall near-term technical control but bulls are working on a price uptrend on the daily chart. 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 the overnight high of 119.20.5 and then at 119.28.0. Shorter-term technical support lies at the overnight low of 118.23.0 and then at 118.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are sharply down and hit a 20-year low in early U.S. trading. Bears have the strong overall near-term technical advantage. 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 1.0400 and then at 1.0450. Shorter-term support is seen at the overnight low of 1.0335 and then at 1.0300. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
Nymex crude oil prices are a bit weaker 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 below 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 $110.00 and then at the overnight high of $111.45. Look for sell stops just below technical support at the overnight low of $107.25 and then at $106.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures were closed overnight due to the U.S. holiday Monday. Non-threatening growing weather in the U.S. Corn Belt at present and non-threatening extended forecasts have the grain market bulls still timid. This week is historically a very important trading week in the grain futures markets. Existing price trends can be accelerated or reversed as weather patterns in early July can make dramatic shifts.
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