Rising World Government Bond Yields Early This Week

Rising World Government Bond Yields Early This Week

Tuesday, July 23–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.

In overnight news, the Euro zone Markit purchasing
managers’ index composite (PMI) was reported at 54.3 in
July from 54.9 in June. A number above 50.0 signals
expansion in the sector.

Featured in the marketplace early this week is rising world
government bond yields, on ideas the major central banks of
the world will embark upon rolling back their heretofore
easy monetary policies. Reports say the Bank of Japan is on
the verge of scaling back its very accommodative policies.

The key “outside markets” today find Nymex crude oil prices
higher and trading just above $68.00 a barrel. Meantime,
the U.S. dollar index is weaker early today.

The big U.S. economic data point of the week is Friday’s
first estimate of gross domestic product (GDP). The number
is expected to come in at up a strong 4.4%. However, some
analysts are even calling for a number of 5.0% or just
above.

U.S. economic data due for release Tuesday includes the
weekly Goldman Sachs and Johnson Redbook retail sales
reports, the monthly house price index, the U.S. flash
services PMI, the flash manufacturing PMI, and the Richmond
Fed business survey.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are firmer and hit
a five-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 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 2,792.50 and then at
2,773.00. Sell stops are likely located just below those
levels. Wyckoff’s Intra-day Market Rating: 6.0

September Nasdaq index December futures: Prices are firmer
and hit a contract high early today. 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 bullish early today. Shorter-term
technical resistance is seen at 7,475.00 and then at
7,500.00. 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: 6.0.

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are firmer in early U.S.
trading, on a corrective bounce after sharp losses Monday
that saw prices hit a five-week low Monday. Shorter-term
moving averages (4- 9- 18-day) are bearish early today. The
4-day moving average is below the 9-day and 18-day. The 9-
day is below the 18-day moving average. Oscillators (RSI,
slow stochastics) are neutral early today. Shorter-term
technical resistance is seen at 143 16/32 and then at 144
even. Buy stops likely reside just above those levels.
Shorter-term support lies at the overnight and Monday’s low
of 142 25/32 and then at 143 even. 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, on a corrective bounce from sharp losses Monday
that saw prices hit a five-week low. Shorter-term moving
averages (4- 9- 18-day) are bearish early today. The 4-day
moving average is below the 9-day. The 9-day is below the
18-day moving average. Oscillators (RSI, slow stochastics)
are neutral early today. Shorter-term resistance lies at
119.24.0 and then at 119.28.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
this week’s low of 119.14.5 and then at 119.10.0. 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 slightly lower in early
U.S. trading. Bulls still have the firm overall near-term
technical advantage but trading has turned choppy. The
shorter-term moving averages for the dollar index are
neutral early today, as the 4-day is even with the 9-day.
The 9-day is above the 18-day moving average. Short-term
oscillators for the dollar index are neutral to bearish
early today. The dollar index finds shorter-term technical
resistance at the overnight high of 94.635 and then at
95.000. Shorter-term support is seen at this week’s low of
93.970 and then at 93.500. Wyckoff’s Intra Day Market
Rating: 4.5

NYMEX CRUDE OIL

September Nymex crude oil prices are firmer in early U.S.
trading. Bulls have some momentum on their side. The
shorter-term moving averages are neutral early today as the
4-day is even with the 9-day. The 9-day is below the 18-day
moving average. Short-term oscillators (RSI and slow
stochastics) are neutral to bullish early today. Look for
buy stops to reside just above technical resistance at
$69.00 and then at this week’s high of $69.31. Look for sell
stops just below technical support at $67.50 and then at
$67.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Grain futures prices were lower overnight. Corn and soybean
crops are looking very good and weather in the Corn Belt is
non-threatening at present. While these two markets are
showing early technical clues that market bottoms are
finally in place, bulls cannot give up too much ground right
now. The wheat market has turned more bullish recently.

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