Friday, June 9–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
In overnight news, China’s producer price index unexpectedly dropped sharply in May, at down 4.6%, year-on-year. That’s the biggest drop in seven years. China’s consumer price index rose 0.2%, year-on-year. This latest data from China is another clue that major central banks of the world are taming problematic inflation.
The marketplace is looking ahead to next week’s FOMC meeting of the Federal Reserve. A majority of the marketplace thinks the Fed will pause in its interest-rate-tightening cycle. But now many market watchers think the U.S. central bank will follow the Bank of Canada’s recent moves. The BOC this week raised interest rates by 0.25% after a four-month pause.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are near steady and trading around $71.25 a barrel. Crude prices briefly dropped sharply Thursday on reports the U.S. and Iran may be getting close to an agreement on its nuclear program that could prompt the lifting of oil sanctions on Iran. However, prices recovered as most traders doubt the U.S. and Iran can really come to terms on the matter. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.755%.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls have the solid 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. 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 4,348.75 and then at 4,375.00. Support for active traders is seen at this week’s low of 4,305.75 and then at 4,269.50. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly down in early U.S. trading. Bulls have the solid 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 14,869.50 and then at 15,000.00. On the downside, shorter-term support is seen at this week’s low of 14,425.00 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 the overnight high of 127 18/32 and then at 128 even. Shorter-term support lies at 127 even and then at 126 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower 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 bearish early today. Shorter-term resistance lies at the overnight high of 113.23.0 and then at 114.00.0. Shorter-term technical support is seen at the May low of 112.29.5 and then at 112.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are a bit weaker in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0846 and then at 1.0900. Shorter-term support is seen at Thursday’s low of 1.0756 and then at the May low of 1.0702. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-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 $73.28 and then at this week’s high of $75.06. Look for sell stops just below technical support at $70.00 and then at this week’s low of $69.03. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed overnight. Corn market bulls and bears are on a level overall near-term technical playing field, while wheat and soybean markets are bearish. Weather in the Corn Belt leans slightly bullish for the grain markets, as it is dry in some regions. Don’t be surprised if some degree of a weather market scare pops up in the near term. Traders are awaiting this morning’s USDA monthly supply and demand 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