Wednesday, July 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S.
stock indexes are pointed toward narrowly mixed openings
when the New York day session begins.
Global trader and investor attitudes remain upbeat, which
is supportive for equities. Federal Reserve Chairman Jerome
Powell gave a very upbeat assessment on the U.S. economy to
a U.S. Senate panel on Tuesday, which helped to boost U.S.
stock indexes to contract or multi-month highs.
In overnight news, the Euro zone consumer price index for
June was reported up 0.1% from May and up 2.0%, year-on-
year. Those numbers were right in line with market
expectations.
The key “outside markets” today find Nymex crude oil prices
lower and trading around $67.50 a barrel. Recent solid
losses in crude suggest this market has topped out. Brent
crude oil prices hit a three-month low today. Meantime, the
U.S. dollar index is higher today and very close to its
recent 12-month high.
U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, new residential
sales, the weekly DOE liquid energy stocks report and the
Federal Reserve’s beige book. Fed Chairman Powell also
speaks to the U.S. House of Representatives today on
monetary policy.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in
early U.S. trading and hit a five-month high overnight. 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 2,789.75 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
lower on mild profit taking after hitting a contract high
overnight. 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 overnight contract high of 7,437.75 and then at
7,450.00. 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: 5.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: 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 below 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 technical resistance is seen at
this week’s high of 145 24/32 and then at 146 even. Buy
stops likely reside just above those levels. Shorter-term
support lies at this week’s low of 144 23/32 and then at 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 higher in early
U.S. trading. 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 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 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 and near the
recent contract high in early U.S. trading. Bulls have the
solid 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. 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 contract high of
94.255 and then at 95.500. Shorter-term support is seen at
the overnight low of 94.720 and then at 94.500. Wyckoff’s
Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are lower in early U.S.
trading. Recent downside price action suggests a market top
is in place. The shorter-term moving averages are bearish
early today as the 4-day is below the 9-day and 18-day. The
9-day is below 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 Tuesday’s high of $68.44 and then at $69.00.
Look for sell stops just below technical support at
Tuesday’s low of $67.03 and then at $66.00. Wyckoff’s Intra-
Day Market Rating: 4.0
GRAINS
Grain futures prices were firmer again overnight on more
short covering and bargain hunting. 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
