Opportunistic Trader Overnight Recap 7/31/18

– BOJ affirms its commitment to policy stimulus in forward guidance statement
– Mixed European growth and inflation data, data remains constructive towards ECB objectives
– Euro Zone CPI beats estimates and remained above ECB target for the 2nd straight month.  France and Italian July CPI came in higher.

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.

U.S. STOCK INDEXE

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.

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

U.S. TREASURY BONDS AND NOTE

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.

 

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

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.

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. 

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.