Monday, July 16–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
There is still little risk aversion among global traders and investors, despite a trade war between the world’s two largest economies. This is keeping a flow of monies into world stock markets, especially in light of a floundering raw commodity sector at present, due to the U.S.-China major trade dispute.
In overnight news, China’s gross domestic product growth in the second quarter was reported at 6.7%, year-on-year, which is lower than the 6.8% growth rate posted in the first quarter. The growth rate is also about in line with the Chinese government’s 6.5% annual growth target.
The world marketplace is watching for news from the summit meeting between U.S. President Trump and Russian President Putin in Finland today.
The key “outside markets” today find Nymex crude oil prices lower and trading just below $70.00 a barrel. The U.S. dollar index is also weaker today.
U.S. economic data due for release Monday includes retail sales, the Empire State manufacturing survey, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady and hit a four-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 the March high of 2,814.00 and then at 2,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,785.00 and then at 2,773.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are slightly higher and near the recent contract high in early U.S. trading. 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 to bullish early today. Shorter-term technical resistance is seen at the contract high of 7,414.25 and then at 7,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 7,367.00 and then at 7,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices are still in a near-term uptrend. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-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 last week’s high of 145 28/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 145 7/32 and then at last week’s low of 144 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at last week’s high of 120.13.0 and then at 120.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.08.0 and then at last week’s low of 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.520 and then at last week’s high of 95.000. Shorter-term support is seen at 94.000 and then at 93.820. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
August Nymex crude oil prices are lower in early U.S. trading, on follow-through pressure from the big sell-off last week. Recent downside price action begins to suggest a market top is in place. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-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 $70.87 and then at $72.00. Look for sell stops just below technical support at last week’s low of $69.23 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were lower overnight. Corn and soybean market bears remain in firm technical command amid world ag trade worries and very good growing weather in the U.S. Corn Belt. Wheat has stabilized on ideas of a shorter world wheat crop this year. Bulls need a weather market in the grains, but the clock is ticking on such developing in the U.S. Corn Belt this year.
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