Tuesday, July 31–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock
indexes are pointed toward slightly higher openings when
the New York day session begins. It will be a busy day for
U.S. economic data.
In focus this week is central bank meetings of the U.S.,
the Bank of Japan and the Bank of England. The BOJ today
left its interest rates unchanged, as expected, but did
surprise the marketplace by reiterating it will maintain
its ultra-low interest rates and easy monetary policy. Only
the BOE is expected to make any policy move—raising its
interest rates slightly. The FOMC meeting of the Federal
Reserve begins Tuesday morning and ends Wednesday afternoon
with a statement.
In overnight news, the Euro zone collective gross domestic
product was reported at up 1.4% in the second quarter,
year-on-year. That’s down 0.1% from the first quarter and
stands in stark contrast to the latest U.S. GDP report that
showed annual growth above 4.0% in the second quarter. The
Euro zone’s consumer price index in July was reported up
2.1%, year-on-year, which was slightly higher than
expected.
The key “outside markets” today find Nymex crude oil prices
weaker and trading just below $70.00 a barrel. The U.S.
dollar index is slightly weaker early today.
U.S. economic data due for release Tuesday includes the
weekly Johnson Redbook and Goldman Sachs retail sales
reports, personal income and outlays, the employment cost
index, the S&P/Case-Shiller home price index, the ISM
Chicago business survey, and the consumer confidence index.
–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 neutral early today. The 4-day
moving average is even with the 9-day. The 9-day is above
the 18-day moving average. Short-term oscillators (RSI, slow
stochastics) are neutral to bearish early today. Today,
shorter-term technical resistance comes in at Monday’s high
of 2,821.75 and then at 2,835.00. Buy stops likely reside
just above those levels. Downside support for active traders
today is located at Monday’s low of 2,798.25 and then at
last 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 slightly
higher in early trading. Bulls still have the overall near-
term technical advantage but are now fading. Shorter-term
moving averages (4- 9-and 18-day) are neutral early today.
The 4-day moving average is below the 9-day and 18-day. The
9-day average is above the 18-day. Short-term oscillators
(RSI, slow stochastics) are neutral to bearish early today.
Shorter-term technical resistance is seen at the 7,250.00
and then at Monday’s high of 7,309.25. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at Monday’s low of 7,166.75 and then at
7,150.00. 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 higher in early U.S.
trading, on short covering after hitting a six-week low on
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 bullish
early today. Shorter-term technical resistance is seen at
the overnight high of 143 16/32 and then at 144 even. Buy
stops likely reside just above those levels. Shorter-term
support lies at the overnight low of 142 18/32 and then at
Monday’s low of 142 12/32. Sell stops likely reside just
below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are firmer in early U.S.
trading. Bears have the overall near-term technical
advantage. 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 bullish
early today. Shorter-term resistance lies at the overnight
high of 119.21.0 and then at 119.25.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 119.11.0 and then at
last week’s low of 119.08.0. 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 and
sideways. 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 bearish early today. The dollar index finds
shorter-term technical resistance at Monday’s high of 94.555
and then at 94.700. Shorter-term support is seen at last
week’s low of 93.870 and then at 93.500. Wyckoff’s Intra Day
Market Rating: 5.0
NYMEX CRUDE OIL
September Nymex crude oil prices are weaker 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 Monday’s
high of $70.43 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: 4.5
GRAINS
Grain futures prices were higher again overnight. Bulls have
good upside momentum to suggest more upside in the near
term. Weather in the Corn Belt is still mostly benign, but
warmer temps are expected in early August. Still, no serious
weather markets have occurred this summer.
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
