Monday, July 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Focus this week will be on U.S. corporate earnings reports.
A feature in the marketplace recently has been falling U.S. government bond yields amid notions that U.S. and global economic growth has leveled off from the stronger pace seen coming out of the pandemic’s shackles. Such can be extrapolated to easier monetary policies for a longer time from the major world’s major central banks. Adding to concerns about less robust global economic growth is a new strain of Covid-19 that is surging in some parts of the world at the same time vaccinations have tailed off.
European Central Bank President Christine Lagarde reportedly said a July 22 Governing Council meeting will include a revision of the ECB’s forward guidance. She also said she expects the current asset purchase program to run until “at least” March 2022, due in part to the new Covid strain denting economic growth in the Euro zone. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.336%.
China on Friday eased its monetary policy by lowering is reserve requirement ratio for its banks.
The key outside markets today see the U.S. dollar index higher, while Nymex crude oil prices are lower and trading around $73.35 a barrel.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading after hitting a 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 4,365.25 and then at 4,400.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,325.00 and then at 4,300.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 contract and record high of 14,883.75 and then at 14,900.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,800.00 and then at 14,700.00. 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 higher in early U.S. trading. A price uptrend is in place on the daily chart and bulls have the firm 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 Friday’s high of 163 22/32 and then at 164 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 162 11/32 and then at 162 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are firmer in early U.S. trading. 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 early today. Shorter-term resistance lies at Friday’s high of 133.26.0 and then at 134.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.10.0 and then at 133.06.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are lower 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 neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1895 and then at the July high of 1.1911. Buy stops likely reside just above those levels. Shorter-term support is seen at Friday’s low of 1.1840 and then at the July low of 1.1797. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $74.93 and then at $76.00. Look for sell stops just below technical support at Friday’s low of $72.72 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures were mostly firmer overnight. Traders are awaiting this morning’s monthly USDA supply and demand report. The main focus is on Corn Belt weather that has been wet and more rain is in the forecast. Bears appear to be in the driver’s seat for at least the near term.
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