Daily Morning Report

Wednesday, June 23–Jim Wyckoff’s Morning Markets Report

Global stock markets were flat to narrowly mixed 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. The marketplace at mid-week appears to be assuaged by comments made to U.S. lawmakers by Federal Reserve Chairman Jerome Powell this week that higher inflation is only transitory and that the Fed will not put the brakes on its easy money policies too soon.

In overnight news, the Euro zone’s composite purchasing managers index (PMI) flash number came in at 59.2 in June versus 57.1 in May, and also beat market expectations. The June composite PMI was the best number in 15 years. A reading above 50.0 suggests growth in the sector.

The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil futures are higher and trading around $73.30 a barrel after hitting a 2.5-year high of $73.58. overnight. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.475%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. flash manufacturing and services PMIs, new residential sales, and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and not far below the recent record high. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 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: 5.5

September Nasdaq index futures: Prices are slightly firmer in early U.S. trading and hit a 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 early today. Shorter-term technical resistance is seen at the overnight contract high of 14,313.75 and then at 14,400.00. 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: 6.5.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are a bit weaker 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 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: 4.5

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 early today. Shorter-term resistance lies at the overnight 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 1.1972 and then at 1.2000. 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 higher in early U.S. trading and hit a 2.5-year high of $73.58 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $73.58 and then at $74.00. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures are mixed to firmer in early U.S. pre-market trading. The weather in the U.S. Corn Belt has gotten 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. 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.

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

Tuesday, June 22–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight, with Asian shares mostly firmer and European shares mostly weaker. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins, after posting solid gains Monday.

The marketplace on Tuesday afternoon will closely scrutinize Federal Reserve Chairman Jerome Powell’s remarks to a House committee. Powell’s prepared text for today’s appearance on the coronavirus pandemic, released Monday afternoon, shows him reiterating the rise in inflation is transitory. Traders and investors will be watching the 2:00 p.m. EDT appearance for his replies to lawmakers’ questions. Powell is known to occasionally go “off-script” in his answers to questions.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures are weaker and trading around $72.65 a barrel after hitting a 2.5-year high of $73.36. overnight. Brent crude traded above $75.00 overnight amid signs global demand for energy continues to increase. Reports said Russia is considering proposing OPEC and its allies increase output at the next OPEC meeting on July 1, with the world oil market presently estimated to need an additional 3 million barrels a day to satisfy demand.

The yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.502%.

U.S. economic data due for release Tuesday includes the weekly chain store sales index and the weekly Johnson Redbook retail report, existing home sales and the Richmond Fed business survey.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 the overnight high of 4,226.25 and then at the contract high of 4,258.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,200.00 and then at 4,175.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0

September Nasdaq index futures: Prices are slightly firmer in early U.S. trading and not far below last week’s record high. 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 early today. Shorter-term technical resistance is seen at the contract high of 14,126.75 and then at 14,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Monday’s low of 13,983.75 and then at 13,900.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are firmer in early U.S. trading after hitting a four-month high Monday. 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 early today. Shorter-term technical resistance is seen at 161 even and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 16/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are slightly up 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 18-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 132.16.0 and then at 132.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’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: 5.5

EURO CURRENCY

The September Euro currency futures are weaker 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 early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1942 and then at 1.2000. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.1867 and then at 1.1800. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Nymex crude oil prices are weaker in early U.S. trading 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 to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $73.36 and then at $74.00. 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 mixed to weaker in early U.S. pre-market trading. The weather in the U.S. Corn Belt has gotten cooler and wetter and that’s bearish. Recent price action suggests major market tops might be in place. Still, the historically hotter and drier months of July and August lie just ahead. Look for more fireworks in the grains in the next couple weeks, but right now the bears have momentum on their side.

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

Friday, June 18–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed but mostly weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The aftermath of the Fed’s FOMC meeting conclusion Wednesday afternoon, which produced a hawkish bent by the U.S. central bank, has very significantly altered the landscape of the marketplace. A look at markets’ price action the past 36 hours shows many of them had major, counter-trend moves that at the very least “wrong-footed” traders and investors and at worst made them become insolvent. Soybean oil futures, for example, had been trending solidly higher and last week hit a record high. Price action this week has seen that market careen sharply lower, including two days in a row of being “locked-limit-down,” meaning that those with bullish bets on the long side were trapped in the price downdraft and unable to exit their major losses. The lean hog futures market saw a similar scenario this week.

Bloomberg reports the U.S. Treasury yield curve has seen its biggest two-day tightening of spreads between shorter-term instruments and longer-term instruments since March of 2020, following the Wednesday FOMC meeting. The yield on the 30-year bond dropped to 2.07%, with investors pulling back their inflation bets after Fed officials signaled two rate hikes by the end of 2023. The marketplace apparently has taken heed to the Fed’s insistence that inflation will be only transitory. Consequently, the “reflation trade” has at least temporarily fizzled, as seen by Thursday’s major drubbing of most raw commodity futures markets.

The key outside markets today see the U.S. dollar index near steady and hitting another two-month high overnight. Nymex crude oil futures are a bit lower and trading around 70.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is fetching 1.487%.

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 weaker in early U.S. trading, on more mild profit taking, and still not far below Tuesday’s record and contract high. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 4,241.50 and then at the contract high of 4,258.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,183.00 and then at 4,160.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5

September Nasdaq index futures: Prices are a bit firmer in early U.S. trading and hit a 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 bearish early today. Shorter-term technical resistance is seen at the overnight contract high of 14,204.75 and then at 14,300.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,000.00 and then at this week’s low of 13,830.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are higher in early U.S. trading after hitting a nearly four-month high on Thursday. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 160 24/32 and then at 161 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 14/32 and then at 159 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are higher 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 132.11.0 and then at 132.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.28.0 and then at 131.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The September Euro currency futures are a bit weaker and hit a two-month low 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.1950 and then at 1.2000. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1905 and then at 1.1850. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Nymex crude oil prices are weaker in early U.S. trading on mild profit taking after hitting a 2.5-year high on 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $71.12 and then at $72.00. Look for sell stops just below technical support at this week’s low of $69.77 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

U.S. grain futures are sharply higher in early U.S. pre-market trading, on upside corrections from major losses posted Thursday. This week’s price action still suggests major market tops might be in place. The extended weather forecasts are calling more rain in the U.S. Midwest next week, but still nothing that would be considered a “drought-buster.” And the historically hotter and drier months of July and August lie just ahead. The strong rebound in the U.S. dollar index this week is bearish for the grains, making U.S. grains more expensive on the world market.

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

Thursday, June 17–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly down overnight following the surprisingly hawkish FOMC meeting results from the Federal Reserve Wednesday afternoon that roiled many markets, including equities. The Fed left U.S. monetary policy unchanged, as expected. However, more FOMC members are now leaning toward raising interest rates sooner than they reckoned earlier this year due to a stronger-rebounding U.S. economy, the receding pandemic and inflation worries. On the inflation front, the Fed said prices are rising but still not at a problematic rate. The Fed sees inflation in 2021 at 3.4% annually, up a full 1% from the 2.4% estimate forecast earlier this year. Recent U.S. inflation reports are running significantly hotter than the 3.4% annual Fed projection on inflation. At Fed Chairman Jerome Powell’s press conference, he did not assuage inflation worries, ostensibly saying the Fed really does not know how much or for how long inflationary pressures will be on the rise. Gold prices tanked to a five-week low, the U.S. dollar index rallied sharply and hit a two-month high and bond and note yields up-ticked. The yield on the benchmark U.S. 10-year Treasury note is fetching 1.56% Thursday morning, after trading below 1.5% earlier this week.

Meantime, Brazil’s central bank raised its benchmark interest rate for the third consecutive time to thwart accelerating inflation. The rate was increased by 75 basis points, to 4.25%. The central bank is planning another 75 basis point rise at its next meeting in August. Meantime, inflation in Brazil rose to 8.1% in May, which is more than double this year’s goal of 3.75%.

The other key outside market today sees Nymex crude oil prices are down a bit and trading around $71.80 a barrel after hitting a 2.5-year high of $72.99 Wednesday.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and leading economic indicators.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are weaker in early U.S. trading, on profit taking, and not far below Tuesday’s record and contract high. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 4,241.50 and then at the contract high of 4,258.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,183.00 and then at 4,160.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5

September Nasdaq index futures: Prices are weaker in early U.S. trading, on mild profit taking, and not far below the record high hit on Tuesday. 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 bearish early today. Shorter-term technical resistance is seen at 14,000.00 and then at the record high of 14,155.25. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 13,830.25 and then at 13,750.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are higher in early U.S. trading. A price uptrend is in place on the daily chart and bulls have the slight 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 early today. Shorter-term technical resistance is seen at 159 even and then at this week’s high of 159 14/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 157 12/32 and then at 157 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are weaker in early U.S. trading and hit a four-week low overnight. A price uptrend on the daily chart has been negated. 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 resistance lies at 132.00.0 and then at 132.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.14.0 and then at 131.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The September Euro currency futures are solidly lower and hit a two-month low 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.2000 and then at the overnight high of 1.2026. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.1946 and then at 1.1900. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 3.5

NYMEX CRUDE OIL

Nymex crude oil prices are weaker in early U.S. trading on mild profit taking after hitting a 2.5-year high on 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.29 and then at this week’s high of $72.99. Look for sell stops just below technical support at the overnight low of $71.33 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

U.S. grain futures are sharply lower in early U.S. pre-market trading. Bulls are fading fast to suggest major market tops might be in place. The extended weather forecasts are calling for a bit more rain in the U.S. Midwest next week, but nothing that would be considered a “drought-buster.” The strong rebound in the U.S. dollar index this week is bearish for the grains, making U.S. grains more expensive on the world market. It’s still early in the growing season and don’t be surprised to see more fireworks in the grain futures in the coming weeks—on the upside and downside.  

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

Wednesday, June 16–Jim Wyckoff’s Morning Markets Report

European stock markets were mostly flat overnight, with Asian shares a bit weaker. The marketplace is awaiting the conclusion of the Fed’s FOMC meeting this afternoon. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Record highs have been scored this week in the S&P 500 and Nasdaq stock index futures. The past several weeks have seen little risk aversion in the marketplace and that’s bullish for the global stock markets.  

The Federal Reserve’s FOMC meeting that began Tuesday morning ends Wednesday afternoon with a statement and new economic projections. While no major changes are expected for U.S. monetary policy, focus will be on the Fed’s tenor on inflation prospects and when the central bank will start to taper its very easy money policies. Fed officials recently have hinted they will begin discussing a timetable for reducing its bond-buying program (quantitative easing) sooner rather than later.

Reports at mid-week say China is set to try to control inflated raw commodity prices. The government will intervene after copper, iron ore and coal prices rose to record highs recently. The state-owned Assets Supervision and Administration Commission (Sasac) ordered China’s businesses to control risks and limit their exposure to overseas commodity markets. Companies have been ordered to report their futures positions for Sasac. China also said its National Food and Strategic Reserves Administration will soon release stockpiles of metals including copper, aluminum and zinc. The metals will reportedly be sold directly to manufacturers. Copper futures prices have sold off sharply on the news.

China’s industrial output was reported up 8.8% in May, year-on-year, which was in line with market expectations.

In other overnight news, consumer prices in the U.K. rose 2.1% in in May, year-on-year–the highest level since July of 2019. The hot inflation number increased speculation about the timing of Bank of England tightening of its monetary policy.

Israeli warplanes carried out a series of strikes at Hamas militant sites in the Gaza Strip Wednesday, the first raids since a cease-fire ended the war with Hamas in May.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are also near steady and trading around $72.20 a barrel after hitting another 2.5-year high of $72.83 overnight. The key U.S. Treasury 10-year note yield is fetching 1.49%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, import and export prices, and the weekly DOE liquid energy stocks report. U.S. Treasury Secretary Yellen testifies to the Senate today on the Biden administration’s fiscal year 2022 budget.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are near steady in early U.S. trading and near Tuesday’s record and contract 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. 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 contract high of 4,258.25 and then at 4,275.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,224.50 and then at last week’s low of 4,197.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0

September Nasdaq index futures: Prices are slightly higher and not far below the record high hit on Tuesday. 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 bearish early today. Shorter-term technical resistance is seen at the record high of 14,155.25 and then at 14,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,000.00 and then at 13,900.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are firmer in early U.S. trading. A price uptrend is in place on the daily chart and 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 early today. Shorter-term technical resistance is seen at this week’s high of 159 14/32 and then at last week’s high of 159 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 158 9/32 and then at 158 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

September U.S. T-Notes: Prices are slightly up in early U.S. trading. A price uptrend is in place on the daily chart. 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 early today. Shorter-term resistance lies at this week’s high of 132.29.5 and then at last week’s high of 133.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.12.0 and then at 132.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The September Euro currency futures are slightly lower 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.2169 and then at 1.2200. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.2114 and then at 1.2081. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Nymex crude oil prices are a bit firmer in early U.S. trading and hit another 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.83 and then at $73.50. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures are mixed in early U.S. pre-market trading. Bulls are fading and need to step up yet this week. If not, major market tops could be in place. The extended weather forecasts are calling for a bit more rain in the U.S. Midwest next week, but nothing that would be considered a “drought-buster.” It’s still early in the growing season and don’t be surprised to see more fireworks in the grain futures in the coming weeks—on the upside and downside.  

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