Monday, July 9–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock
indexes are pointed toward higher openings when the New York
day session begins.
There were no major markets-moving news developments over
the weekend. Key U.S. economic data released this week
includes the producer price index on Wednesday and the
consumer price index on Thursday.
One worrisome development among economists in recent months
is the very flat U.S. Treasury yield curve (the yield
difference between the 2-year and 10-year notes) that has
now fallen to a level below 0.3%. If the yield curve
inverts, whereby the 2-year note yield rises above the 10-
year note yield, such would strongly suggest a U.S.
recession is on the horizon. The very closely watched yield
curve and its potential for inverting could keep the Federal
Reserve from raising U.S. interest rates as quickly as it
would like—given the present stronger U.S. economic growth
pace.
The key “outside markets” today find Nymex crude oil prices
slightly weaker and trading around $73.50 a barrel. The
U.S. dollar index is also lower as the greenback bulls have
faded recently.
U.S. economic data due for release Monday includes the
employment trends index and consumer credit.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher and hit
a two-week high in early U.S. trading. The bulls have the
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 bullish early today. Today,
shorter-term technical resistance comes in at the June high
of 2,796.00 and then at the March high of 2,814.00. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at the overnight
low of 2,761.75 and then at 2,750.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 6.0
September Nasdaq index December futures: Prices are higher
and hit a two-week high in early U.S. trading. Bulls have
the firm 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 bullish early today. Shorter-term
technical resistance is seen at 7,300.00 and then at the
June high of 7,358.50. Buy stops likely reside just above
those levels. On the downside, short-term support is seen at
the overnight low of 7,032.25 and then at 7,000.00. 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 lower in early U.S.
trading, on some profit taking from recent gains. Prices are
still in a near-term uptrend. 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
above the 18-day moving average. Oscillators (RSI, slow
stochastics) are bearish early today. Shorter-term technical
resistance is seen at the overnight high of 145 28/32 and
then at last week’s high of 146 11/32. Buy stops likely
reside just above those levels. Shorter-term support lies at
145 even and then at last week’s low of 144 16/32. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S.
trading. Shorter-term moving averages (4- 9- 18-day) are
still 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 bearish
early today. Shorter-term resistance lies at the overnight
high of 120.12.5 and then at last week’s high of 120.20.0.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at last 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: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker and hit a three-
week low in early U.S. trading. Bulls still have the overall
near-term technical advantage but have faded. 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 even with 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
the overnight high of 93.740 and then at 94.000. Shorter-
term support is seen at the overnight low of 93.460 and then
at 93.250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
August Nymex crude oil prices are slightly lower in early
U.S. trading. The bulls still have the firm overall near-
term technical advantage. 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
neutral early today. Look for buy stops to reside just above
technical resistance at the overnight high of $74.28 and
then at $75.00. Look for sell stops just below technical
support at $73.00 and then at $72.50. Wyckoff’s Intra-Day
Market Rating: 4.5
GRAINS
Grain futures prices were lower overnight, on corrective
pullbacks from good gains last Friday. Traders will closely
examine today’s weekly USDA export inspections report. Bears
are still in technical command. World ag trade worries and
generally good growing weather in the U.S. Corn Belt remain
bearish.
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
