Thursday, June 1–Jim Wyckoff’s morning markets report
Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The marketplace has been assuaged by the U.S. House of Representatives handily passing the government debt-ceiling-extension deal reach between Republicans and Democrats. The measure now goes before the Senate and is expected to also pass.
Traders are now looking ahead to the Labor Department’s employment situation report for May on Friday morning. The key non-farm payrolls number is seen coming in at up 190,000 compared to the April non-farm jobs number of up 253,000. The Wall Street Journal reported today the Fed is likely to pause in its interest-rate-hiking cycle at the June FOMC meeting, before raising rates again later this summer. That’s a shift from the consensus marketplace belief just recently that the Fed would again raise rates at the June FOMC meeting. However, a “sizzling jobs report” on Friday would throw cold water on the Fed pause, said the Journal report.
In overnight news, the Euro zone May consumer price index came in at up 6.1%, year-on-year, compared to the April reading of up 7.0%. The May reading was lower than expected.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are near steady and are trading around $68.00 a barrel. Concerns about weaker global energy demand have hit crude oil this week. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.677%.
A very heavy U.S. economic data slate Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ADP national employment report, revised productivity and costs, the U.S. manufacturing PMI, the global manufacturing PMI, domestic auto industry sales, monthly chain store sales, the ISM report on business manufacturing, construction spending 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. 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 to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,285.25 and then at 4,300.00. Support for active traders is seen at this week’s low of 4,216.00 and then at 4,187.50. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly higher 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 neutral early today. Shorter-term technical resistance is seen at the contract high of 14,737.00 and then at 14,900.00. On the downside, shorter-term support is seen at 14,400.00 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 128 22/32 and then at 129 even. Shorter-term support lies at Wednesday’s low of 127 14/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: 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 even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 114.20.0 and then at 115.00.0. Shorter-term technical support is seen at 114.00.0 and then at 113.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are higher on short covering after hitting a 2.5-month low Wednesday. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0813 and then at 1.0900. Shorter-term support is seen at this week’s low of 1.0702 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at Wednesday’s high of $69.69 and then at $71.00. Look for sell stops just below technical support at this week’s low of $67.03 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were higher overnight on corrective bounces from recent selling pressure. The big drop in crude oil prices this week is bearish for the grains. The near-term technical postures for soybeans, meal, bean oil, wheat and corn futures are all overall bearish. On tap 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