Friday, July 14–Jim Wyckoff’s morning markets report
Said Craig Erlam of OANDA in a Friday morning email dispatch: “It’s shaping up to be quite a relaxed end to the week… on the back of some very encouraging inflation data from the US. Inflation was already well off its highs but there was something about (the U.S. CPI) report that was different. Not only did it beat on the headline and core level but both of the monthly readings were also incredibly positive. Now it’s just a question of whether that can be sustained. The light at the end of the tightening tunnel is getting brighter and investors are increasingly confident of emerging after one more (Fed) hike in two weeks. At which point the focus will turn to the U.S. economy and whether a soft landing can still be achieved before the discussion pivots to rate cuts.”
The potential “fly in the ointment” for a sustainable global economic recovery is downbeat economic data that has been coming out of China lately. The world’s second-largest economy is a voracious consumer of raw commodities. A Wall Street Journal report today said: “Exports are crumbling in China and across Asia, showing the deepening toll that rising interest rates are taking on global trade and economic growth.”
The key outside markets today see the U.S. dollar index a bit higher and hitting a 15-month low in overnight trading. Meantime, Nymex crude oil prices are slightly down and trading around $76.75 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.787%.
U.S. economic data due for release Friday includes import and export prices and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading and near this week’s 15-month 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. 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 this week’s high of 4,551.50 and then at 4,575.00. Support for active traders is seen at Thursday’s low of 4,509.25 and then at Wednesday’s low of 4,470.00. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly lower but near this week’s contract high in early U.S. trading. Bulls have the solid near-term technical 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 this week’s contract high of 15,741.25 and then at 15,900.00. On the downside, shorter-term support is seen at Thursday’s low of 15,456.00 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are weaker 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 technical resistance is seen at this week’s high of 127 2/32 and then at the July high of 127 24/32. Shorter-term support lies at the overnight low of 126 15/32 and then at 126 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are lower 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 113.03.0 and then at 113.15.0. Shorter-term technical support is seen at the overnight low of 112.21.0 and then at Thursday’s low of 112.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading and hit another 15-month high overnight. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1280 and then at 1.1300. Shorter-term support is seen at 1.1200 and then at Thursday’s low of 1.1166. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above 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 this week’s high of $77.33 and then at $78.00. Look for sell stops just below technical support at $76.00 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were higher overnight. It’s been a choppy trading week in the grains. The corn market is still overall bearish, soybeans are bullish and wheat neutral to bearish. Weather forecasts for the U.S. Midwest are not bullish. The Midwest weather will have to in a hurry turn hotter and drier than present extended forecasts, in order to reignite another weather scare this summer.
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