U.S. GDP Report on Deck; Big Number Expected

U.S. GDP Report on Deck; Big Number Expected

Friday, July 27–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer overnight, following
the U.S. and European Union initial agreement to stop
slapping trade tariffs on each other. U.S. stock indexes
are pointed toward slightly higher openings when the New
York day session begins. U.S. stock index futures on
Wednesday hit new contract or multi-month highs.

The big U.S. economic data point of the week is this
morning’s first estimate of second-quarter gross domestic
product (GDP). The number is expected to come in at up a
strong 4.4%, with some analysts even calling for a number
of 5.0% or just above. However, some weak economic data
released Thursday has some analysts scaling back their GDP
number for today. Look for more active trading in many
markets in the aftermath of the GDP number, especially if
it’s a miss from forecasts.

In overnight news, European Union forecasters slightly
raised their expectations for EU inflation in the years
2018-2020 to 1.7%. The numbers had been 1.5% to 1.6% annual
inflation during those years.

The key “outside markets” today find Nymex crude oil prices
weaker and trading just above $69.00 a barrel. The U.S.
dollar index is slightly higher early today.

Other U.S. economic data due for release Friday includes
the University of Michigan consumer sentiment survey.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are slightly higher
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 early today. Today,
shorter-term technical resistance comes in at this week’s
high of 2,838.50 and then at 2,850.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at Wednesday’s low of 2,814.00 and
then at this week’s low of 2,792.50. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 5.5

September Nasdaq index December futures: Prices are firmer
in early 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 early today. Shorter-term technical resistance is
seen at the 7,500.00 and then at Wednesday’s contract high
of 7,530.00. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the
overnight low of 7,451.75 and then at 7,400.00. 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 slightly higher in early
U.S. trading but did hit a five-week low overnight. 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 to bearish early today.
Shorter-term technical resistance is seen at Thursday’s high
of 143 8/32 and then at 143 19/32 even. Buy stops likely
reside just above those levels. Shorter-term support lies at
the overnight low of 142 17/32 and then at 142 even. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 5.0

September U.S. T-Notes: Prices are near steady and hit a
five-week low in early U.S. trading. 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 to bearish early today. Shorter-term resistance
lies at Thursday’s high of 119.18.0 and then at 119.22.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at the overnight low of
119.08.0 and then at 119.00.0. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
5.0

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly higher in early
U.S. trading. Bulls 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 below the 9-day and 18-
day. The 9-day is above the 18-day moving average. Short-
term oscillators for the dollar index are neutral to bullish
early today. The dollar index finds shorter-term technical
resistance at the overnight high of 94.700 and then at
95.000. Shorter-term support is seen at the overnight low of
94.435 and then at 94.000. Wyckoff’s Intra Day Market
Rating: 5.5

NYMEX CRUDE OIL

September Nymex crude oil prices are slightly lower in early
U.S. trading. The shorter-term moving averages 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 (RSI
and slow stochastics) are neutral early today. Look for buy
stops to reside just above technical resistance at $70.00
and then at $71.00. Look for sell stops just below technical
support at $69.00 and then at $68.00. Wyckoff’s Intra-Day
Market Rating: 5.0

GRAINS

Grain futures prices were mixed overnight. Bulls have gained
upside momentum this week. A surprisingly downbeat trader
take on a U.S. spring wheat crop tour this week boosted
wheat prices sharply higher, and corn and soybeans saw
spillover support. Also, with the spring wheat crop
surprisingly missing heretofore very upbeat condition
expectations, many are wondering if the same will hold true
for corn and soybean conditions in the Midwest in the coming
few weeks.

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