Thursday, June 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. indexes are trading not far below their recent record highs. It’s a very busy day for U.S. economic reports Thursday. Concerns about rising inflation are still lingering after the Federal Reserve’s beige book Wednesday afternoon said supply chain bottlenecks are causing some product shortages and leading to higher prices, and such could continue the rest of this year.
In overnight news, the Euro zone’s May services purchasing managers index (PMI) came in at 55.2 versus 50.5 in April. A reading above 50.0 suggests growth in the sector.
Traders are gearing up for what is arguably the most important U.S. economic report of the month, Friday morning’s Employment Situation Report for May from the Labor Department. The key non-farm payrolls number is forecast to come in up around 675,000 after paltry rise of 266,000 in April. The unemployment rate for May is seen at 5.9% versus 6.1% in April.
The key outside markets today see the U.S. dollar index higher on a corrective bounce from recent selling pressure. Nymex crude oil prices are a bit weaker after hitting a 2.5-year high overnight, and are trading around $68.65 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.604%.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading and not far from 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,203.00 and then at the contract high of 4,228.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,150.00 and then at 4,125.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are lower in early U.S. trading. 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 the overnight high of 13,695.00 and then at this week’s high of 13,761.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,500.00 and then at 13,400.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly down in early U.S. trading today. Bears have the overall near-term technical advantage. 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 technical resistance is seen at the overnight high of 156 23/32 and then at 157 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 155 16/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker 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 132.00.0 and then at last week’s high of 132.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131.19.5 and then at 131.15.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are bearish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2238 and then at this week’s high of 1.2278. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.2188 and then at last week’s low of 1.2157. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly weaker after hitting a 2.5-year high overnight. 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $69.40 and then at $70.00. Look for sell stops just below technical support at $67.50 and then at this week’s low of $66.41. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are higher in early U.S. pre-market trading. Grain market bulls have made a strong recovery from recent selling pressure, amid a fresh weather market scare, to suggest the markets put in near-term bottoms last week. The extended weather forecasts for through at least mid-June are calling for warmer and drier weather conditions in much of the U.S. midsection. Weekly USDA export sales data is delayed this week until Friday due to the holiday Monday.
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