Thursday, June 24–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins and are at or near their record highs. There remains little risk aversion in the global marketplace at present, amid a generally calm geopolitical environment.
Today’s Bank of England meeting on its monetary policy saw no changes. However, the rise of U.K. inflation above the BOE’s target has increased speculation about the timing of future tightening.
Federal Reserve Bank of Atlanta President Raphael Bostic said he would be in favor of lifting U.S. interest rates in 2022 and that tapering could happen in the next few months.
Broker SP Angel said this morning in an email dispatch, regarding a 30-year super-cycle in commodity markets: “There is much debate about the nature of the bull run in commodities that we are in at present. Historically strong growth cycles are driven by seismic changes to global consumption and generally last more than just a couple of years. The driver for today’s growth in commodity demand started in China in 1992 when President Jiang Zemin introduced the term ‘socialist market economy’ following Deng Xiaoping’s urge to accelerate ‘opening up and reform’. The move ended China’s long-run economic stagnation and isolation with economic growth of 9.5% annually estimated from 1978 to 2013, albeit off a very low base. Global demand for commodities is partly driven by the emergence of China driven by ongoing demand growth in the West, particularly the U.S. A new phase of growth for metals for EVs, wind farms, batteries is also upon us. U.S. stimulus to counteract and keep pace with the emergence of China as a new superpower is also driving demand for most metals.”
The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil futures are a bit weaker and trading around $73.00 a barrel after hitting a 2.5-year high of $74.25 on Wednesday. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.489%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of first-quarter GDP, durable goods orders and the Federal Reserve Bank of Kansas City manufacturing report. Several Federal Reserve officials are also slated to speak today.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are up in early U.S. trading and close to the recent record high. Bulls have the solid 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,258.25 and then at 4,280.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 4,205.75 and then at 4,175.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.5
September Nasdaq index futures: Prices are higher in early U.S. trading and hit another contract and record high overnight. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 14,358.75 and then at 14,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,200.00 and then at Tuesday’s low of 14,066.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. A price uptrend is in place on the daily chart and bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are 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 neutral to bearish early today. Shorter-term technical resistance is seen at Tuesday’s high of 160 12/32 and then at 161 even. Buy stops likely reside just above those levels. Shorter-term support lies at Tuesday’s low of 159 8/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are slightly down in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at Wednesday’s high of 132.15.0 and then at 132.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 132.00.0 and then at 131.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are slightly up in early U.S. trading. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1990 and then at 1.2026. Buy stops likely reside just above those levels. Shorter-term support is seen at Tuesday’s low of 1.1900 and then at last week’s low of 1.1867. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly down in early U.S. trading after hitting a 2.5-year high of $74.25 Wednesday. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $73.61 and then at $74.25. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading. The weather in the U.S. Corn Belt has been cooler and wetter and that’s bearish. Recent price action suggests major market tops are in place. Still, the historically hotter and drier months of July and August lie just ahead and those two months are also arguably the most important for the corn and soybean crops. Look for more volatility in the grains in the next couple weeks, but right now the bears have momentum on their side and the bulls are on the ropes. Due out today is the weekly USDA export sales report.
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
