Wednesday, June 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Trader and investor risk appetite is tepid at best at mid-week.
The U.S. data point of the week is the Federal Reserve’s FOMC meeting that began Tuesday morning and ends Wednesday afternoon with a statement. The Fed is expected to raise U.S. interest rates by at least 0.5%, with many now leaning to a 0.75% rate hike. Fed Chairman Jerome Powell will hold a press conference after the FOMC meeting concludes Wednesday afternoon.
Today saw an emergency meeting of European Central Bank. The governing council will “discuss current market conditions,” said a report. The worry for policymakers is the rapid repricing of euro-zone financial assets since last week’s scheduled ECB meeting, which indicated an interest rate hike in July. Italy, Spain and Greece have seen their government bond yields spike, as those are the weaker economies in the Euro zone.
The key outside markets today see Nymex crude oil prices lower and trading around $117.25 a barrel. The U.S. dollar index is solidly lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.39%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, the Empire State manufacturing survey, import and export prices, manufacturing and trade inventories, Treasury international capital data, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading on short-covering bounces after the market hit a contract low on Tuesday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 3,807.50 and then at this week’s high of 3,878.50. Support for active traders is seen at the contract low of 3,708.50 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer early U.S. trading on short covering after hitting a contract low on Tuesday. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 11,534.50 and then at this week’s high of 11,811.75. On the downside, shorter-term support is seen at the contract low of 11,236.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are solidly higher in early U.S. trading, on short covering after hitting a contract low Tuesday. Bears are still in solid overall near-term technical control. 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 bullish early today. Shorter-term technical resistance is seen at Tuesday’s high of 134 3/32 and then at 135 even. Shorter-term support lies at the contract low of 131 3/32 and then at 130 16/32. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are solidly higher in early U.S. trading on short covering after hitting a contract low on Tuesday. Bears are in solid overall near-term technical control. 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 bullish early today. Shorter-term resistance lies at Tuesday’s high of 116.03.0 and then at this week’s high of 116.25.0. Shorter-term technical support lies at the contract low of 114.07.5 and then at 114.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are solidly higher on short covering. Bears still have the solid overall near-term technical advantage. 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 today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0582 and then at 1.0600. Shorter-term support is seen at this week’s low of 1.0464 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
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 even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $120.00 and then at the June high of $123.18. Look for sell stops just below technical support at this week’s low of $116.62 and then at $115.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures prices were mixed to weaker in early U.S. pre-market trading. Keener risk aversion in the marketplace this week is a bearish element for the grain markets. Bulls have the overall near-term technical advantage to suggest a sideways, trading-range grind for the month of June. Grain market bulls are hoping for a weather market in the coming weeks, but right now there are no strong indications of such. However, weather forecasts for the Corn Belt in the summertime can “change on a dime.”
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