Tuesday, July 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
In overnight news, the Euro zone Markit purchasing managers’ index composite (PMI) was reported at 54.3 in July from 54.9 in June. A number above 50.0 signals expansion in the sector.
Featured in the marketplace early this week is rising world government bond yields, on ideas the major central banks of the world will embark upon rolling back their heretofore easy monetary policies. Reports say the Bank of Japan is on the verge of scaling back its very accommodative policies.
The key “outside markets” today find Nymex crude oil prices higher and trading just above $68.00 a barrel. Meantime, the U.S. dollar index is weaker early today.
The big U.S. economic data point of the week is Friday’s first estimate of gross domestic product (GDP). The number is expected to come in at up a strong 4.4%. However, some analysts are even calling for a number of 5.0% or just above.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the U.S. flash services PMI, the flash manufacturing PMI, and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer and hit a five-month high in early U.S. trading. The bulls have the firm 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 to bullish early today. Today, shorter-term technical resistance comes in at 2,825.00 and then at 2,840.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,792.50 and then at 2,773.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index December futures: Prices are firmer and hit a contract high early today. Bulls have the solid overall 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 and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 7,475.00 and then at 7,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,400.00 and then at 7,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer in early U.S. trading, on a corrective bounce after sharp losses Monday that saw prices hit a five-week low Monday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 technical resistance is seen at 143 16/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight and Monday’s low of 142 25/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading, on a corrective bounce from sharp losses Monday that saw prices hit a five-week low. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 119.24.0 and then at 119.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.14.5 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage but trading has turned choppy. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.635 and then at 95.000. Shorter-term support is seen at this week’s low of 93.970 and then at 93.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are firmer in early U.S. trading. Bulls have some momentum on their side. 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 to bullish early today. Look for buy stops to reside just above technical resistance at $69.00 and then at this week’s high of $69.31. Look for sell stops just below technical support at $67.50 and then at $67.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were lower overnight. Corn and soybean crops are looking very good and weather in the Corn Belt is non-threatening at present. While these two markets are showing early technical clues that market bottoms are finally in place, bulls cannot give up too much ground right now. The wheat market has turned more bullish recently.
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