Wednesday, July 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer in subdued trading overnight, as the marketplace awaits today’s FOMC meeting conclusion. U.S. stock indexes are slightly higher just ahead of the New York day session.
Gold prices are moderately lower today on more profit-taking from the shorter-term futures traders, after recent price gains.
Traders and investors are awaiting the conclusion of the Federal Reserve’s Open Market Committee meeting (FOMC) that began Tuesday morning and ends early this afternoon with a statement. No changes in U.S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U.S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U.S. monetary policy.
In overnight news, the U.K.’s second-quarter GDP came in at up 0.3% on the quarter and up 1.7%, year-on-year. Those numbers were right in line with market expectations.
The “outside markets” on Wednesday morning see Nymex crude oil futures firmer. Prices Tuesday hit a six-week high and the market is in a near-term uptrend. Meantime, the U.S. dollar index is near steady as the greenback tries to stabilize after hitting a 13-month low on Tuesday.
Other U.S. economic data due for release today includes the weekly MBA mortgage applications survey, new residential sales, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly higher in early U.S. trading. Prices Tuesday scored a contract and record high. The 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 2,478.75 and then at 2,490.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,463.50 and then at last week’s low of 2,448.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index September futures: Prices are slightly higher in early U.S. trading today. Prices Monday hit a record high. 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 neutral early today. Shorter-term technical resistance is seen at the contract high of 5,954.75 and then at 5,975.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 5,905.00 and then at 5,889.00. 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 slightly higher in early U.S. trading, on a corrective bounce from this week’s strong selling pressure. Bulls still have the overall near-term technical advantage, but have faded. Shorter-term moving averages (4- 9- 18-day) are still bullish 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 technical resistance is seen at 153 even and then at 153 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 152 14/32 and then at 152 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. Bulls have faded this week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 125.24.0 and then at 125.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.15.5 and then at 125.10.0. 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 higher on a tepid bounce after hitting a 13-month low Tuesday. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 94.170 and then at 94.500. Shorter-term support is seen at this week’s low of 93.460 and then at 93.250. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are firmer in early U.S. trading. Prices have been trending higher for five weeks. It appears a near-term market bottom is in place. Look for buy stops to reside just above technical resistance at this week’s high of $48.66 and then at $49.00. Look for sell stops just below technical support at $48.00 and then at $47.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were firmer overnight, on corrective bounces following this week’s strong losses. Better rainfall chances and cooler temps are forecast for the U.S. Corn Belt in the coming days. The rest of this week’s price action in the grains will likely determine if the weather market has run its course, or if it still has legs to run.