Crude Oil Bulls Fading; Lower Close Fri. Signals Market Top

Crude Oil Bulls Fading; Lower Close Fri. Signals Market Top

Friday, July 13–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer overnight. U.S. stock
indexes are pointed toward slightly higher openings when the
New York day session begins. U.S. stock indexes hit multi-
month highs overnight. There is little risk aversion in the
marketplace at present, which is keeping a flow of investor
monies into world equities markets.

The British pound is under some pressure versus the U.S.
dollar today as President Trump has criticized U.K. Prime
Minister May for her Brexit strategy. May is perceived to be
in a very weak position in her leadership, at present.

The key “outside markets” today find Nymex crude oil prices
weaker on follow-through selling from strong losses posted
Wednesday, and are trading just above $70.00 a barrel. A
lower close in the Nymex oil futures market today would be
a technical clue that crude oil has put in at least a near-
term top, if not a major top.

Meantime, the U.S. dollar index is higher today as the
greenback bulls have had a good week. The USDX is now not
far below its recent 12-month high. A U.S. consumer
inflation reading Thursday that hit a six-year high (CPI at
2.9% annually) has bolstered notions the Federal Reserve
will raise interest rates a total of four times this year.

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 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 overnight high of 2,807.25 and
then at 2,814.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at 2,775.00 and then at this week’s low of 2,761.75. 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 hit another 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 overnight 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 7,350.00 and
then at 7,300.00. 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 higher 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 this 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 the overnight low of
145 7/32 and then at this week’s low of 144 30/32. 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. 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 resistance lies at this 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
this week’s low of 120.00.0 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 higher in early U.S.
trading. Prices are back near the June high. Bulls 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 bullish early today. The dollar
index finds shorter-term technical resistance at the June
high of 95.255 and then at 95.500. Shorter-term support is
seen at the overnight low of 94.565 and then at 94.000.
Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

August Nymex crude oil prices are lower in early U.S.
trading, on follow-through pressure from the big sell-off on
Wednesday. A lower close today would 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. 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
Thursday’s high of $70.42 and then at $71.00. Look for sell
stops just below technical support at this week’s low of
$69.23 and then at $69.00. Wyckoff’s Intra-Day Market
Rating: 4.5

GRAINS

Grain futures prices mixed to 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 rallied a bit on ideas of a
shorter world wheat crop this year. Thursday’s USDA report
was bullish for corn, and a bit bearish for soybeans and
wheat.

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