Friday, July 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The important U.S. employment report from the Labor Department is out Friday morning, with the non-farm jobs number expected to come in at up 195,000 in June. Thursday’s ADP national employment report for June showed a rise of 177,000 jobs. A big miss on the non-farm jobs number this morning, from the consensus forecast, will likely move many markets.
The U.S. and China remain headed for a full-blown trade war. Both nations on Friday put into effect their already-announced trade sanctions against each other. China today said the U.S. has launched the biggest trade war in economic history. The world marketplace did not react much to this news, as the tit-for-tat moves today were fully expected. However, the Federal Reserve’s FOMC minutes released Thursday afternoon showed committee members are worried about a trade war curtailing U.S. economic growth.
In other news, reports said that Bitcoin today becomes outlawed as a transaction vehicle by India.
The Euro zone got some much-need positive economic news today when German industrial production showed a solid rise of 2.6% in May, from April.
The key “outside markets” today find Nymex crude oil prices slightly lower and trading around $72.50 a barrel. The U.S. dollar index is also lower as the greenback bulls have faded a bit this week.
Other U.S. economic data due for release Friday includes the international trade in goods and services report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. The bulls have the slight 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 above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,750.00 and then at 2,765.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 2,710.75 and then at last week’s low of 2,693.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index December futures: Prices are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below 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 high of 7,165.00 and then at 7,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,050.00 and then at 7,000.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Prices are in a near-term uptrend. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 145 25/32 and then at the May high of 145 28/32. Buy stops likely reside just above those levels. Shorter-term support lies at 145 even and then at this week’s low of 144 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up 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 last week’s high of 120.14.5 and then at 120.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.30.0 and then at 119.24.0. 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 weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded this week. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 94.345 and then at this week’s high of 94.730. Shorter-term support is seen at 93.830 and then at 93.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
August Nymex crude oil prices are lower in early U.S. trading, following a surprising build in U.S. oil stocks this week. The shorter-term moving averages are still bullish early today as the 4-day is above the 9-day. The 9-day is above with 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 $73.32 and then at $74.00. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mixed overnight. Traders will closely examine today’s weekly USDA export sales report. Bears are still in technical command. World ag trade worries and generally good growing weather in the U.S. Corn Belt remain bearish. It’s going to take a mid- or late-summer weather market scare to jump-start rallies in the stumbling grain markets.
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