Daily Morning Report

Tuesday, June 30–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading, on this last day of the month and of the second quarter. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Risk appetite has receded a bit recently amid the Covid-19 resurgence in many countries, including the U.S., where several hotspot states are starting to shut down businesses again.

U.S. Federal Reserve Chairman Jerome Powell will testify to a congressional committee today. In prepared remarks, he said the U.S. economy has rebounded faster than expected from Covid-19 damage to businesses, but also said there are still challenges, most notably keeping the pandemic contained. U.S. Treasury Secretary Steven Mnuchin will also testify to the House committee today.

In overnight news, China’s government put into effect its so-called national security law to tighten its grip on Hong Kong. Meantime, there is a brewing geopolitical rift between the U.S. and Russia after reports surfaced that Russia offered the Taliban bounties to kill U.S. soldiers.

It’s a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%.

The important outside markets today see Nymex crude oil prices weaker and trading around $39.00 a barrel. The U.S. dollar index is firmer early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.63% level.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P Core Logic Case Shiller home indexes, the ISM Chicago business survey, the consumer confidence index.

–Jim
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See on the daily bar chart for the September e-mini stock index futures that the recent price uptrend has stalled out and price action has turned sideways to lower. The bulls are fading as the price uptrend appears to be rolling over. See, too, at the bottom of the chart that the MACD indicator recently produced a sell signal when the blue MACD line crossed below the red trigger line.–Stay tuned! Jim

Monday, June 29–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed and choppy in overnight trading. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Trader and investor risk appetite continues to pull back as the Covid-19 pandemic continues to spread in many countries. News headlines to start the trading week highlight the pandemic’s worldwide death toll has passed 500,000 and the total number of reported cases is above 10 million. In a grim markets assessment, one research analyst this morning said in an email dispatch: “Hopes of a robust economic recovery following the pandemic are now shattered. The risks of re-imposing lockdowns are high and monetary policy stimulus which explains most of the recovery in asset prices from the March lows will become less effective going forward if it doesn’t translate into a rebound in economic activity and better prospects for corporate earnings. Risk asset valuations remain elevated and the next few weeks ahead will tell us whether they will continue to hold or get bumped.”

Gold prices continue to benefit from safe-haven demand amid the resurgence of Covid infections and the potential for further damage to global economies.

It’s a holiday-shortened U.S. trading, as markets are closed Friday for the Independence Day holiday. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%.

The important outside markets today see Nymex crude oil prices slightly weaker and trading around $38.50 a barrel. The U.S. dollar index is lower early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.7% level.

U.S. economic data due for release Monday includes pending home sales and the Texas manufacturing outlook survey.

–Jim
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Friday, June 26–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward steady to mixed openings when the New York day session begins. Equities investors on Friday are being buffeted by the competing forces of easy central bank money that has been flowing into stock markets, countered by rising concerns this week about a “second wave” of Covid-19 infections again squelching major economies. The Texas governor has stopped the reopening of businesses in his state as the Covid infection rate spikes and hospitals are filling up. Other U.S. states are also seeing alarming rises in infections.

The important outside markets today see Nymex crude oil prices firmer and trading around $39.00 a barrel. The U.S. dollar index is slightly down early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.

The important U.S. economic data release of the day Friday is personal income and outlays for May. Income is seen down 7.0% and outlays (spending) is seen up 8.7% in the month, compared to April. The marketplace wants to see if today’s numbers beat expectations on the upside. The other data point in the U.S. today is the University of Michigan consumer sentiment survey.

–Jim
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See on the daily bar chart for the September Euro currency that the recent price uptrend has stalled out and price action has turned sideways and choppy. The bulls are fading. See, too, at the bottom of the chart that the MACD indicator recently produced a sell signal when the blue MACD line crossed below the red trigger line.–Stay tuned! Jim

Thursday, June 25–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed to lower in overnight trading. U.S. stock indexes are pointed toward steady to weaker openings when the New York day session begins, following strong losses Wednesday. The Covid-19 pandemic appears to be spreading at a more alarming rate again in many countries, including the U.S. That has sapped trader and investor confidence late this week.

Many health experts are saying two months of progress in the U.S. has been thrown out the window because businesses opened up too early and Americans are not being vigilant enough because they got “Covid-fatigue.” It seems unlikely the U.S. will get locked down to the degree seen in the spring. Still, the worrisome rise in infections the past couple weeks could bring a halt to the rapid U.S. economic recovery seen since businesses started reopening. That is what has the U.S. stock indexes selling off.

Another concern for the marketplace is rumblings the U.S. could implement more trade tariffs against the European Union and the U.K. The U.S. and China (the world’s two largest economies) already have strained relations on trade and other matters.

There is also trader talk the marketplace is beginning to sense President Trump is in real danger of losing his re-election bid in November. A win by the Democrat, Joe Biden, would probably see corporate and wealthy American tax increases as well as more regulations on businesses—bearish for the stock market.

The important outside markets today see Nymex crude oil prices weaker and trading around $37.75 a barrel. The U.S. dollar index is up early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.

It’s a busy day for U.S. economic data Thursday, including the weekly jobless claims report, the third estimate for first-quarter gross domestic product, the advance economic indicators report, durable goods orders and the Kansas City Fed manufacturing survey.

–Jim
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U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading as trading has been sideways recently. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,056.00 and then at 3,100.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,005.00 and then at 2,975.00. Wyckoff’s Intra-day Market Rating: 4.5

September Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls remain in firm technical command. 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 10,150.00 and then at the record high of 10,296.25. On the downside, shorter-term support is seen at this week’s low of 9,843.50 and then at 9,700.00. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are up and hit a four-week high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 178 17/32 and then at 179 even. Shorter-term support lies at the overnight low of 178 1/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls still have the solid near-term technical advantage as prices trade sideways at higher levels. 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 resistance lies at 139.03.0 and then at 139.10.0. Shorter-term technical support lies at the overnight low of 138.27.5 and then at 138.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early U.S. trading. Bears have the overall near-term technical advantage but the bulls have stabilized the market. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 97.700 and then at 98.000. Shorter-term support is seen at the overnight low of 97.135 and then at 97.000. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

August Nymex crude oil prices are lower in early U.S. trading on a corrective pullback after hitting a nearly four-month high on Tuesday. Bulls are fading a bit. A price uptrend is still in place on the daily chart. 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 $38.46 and then at $39.00. Look for sell stops just below technical support at $37.00 and then at $36.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

US grain futures are mixed in early U.S. pre-market trading. On tap today is the weekly USDA export sales report. Grain market bears are firmly in control to suggest sideways to lower price action in the near term. The only thing that will rescue the bulls is a weather market developing in the U.S. Corn Belt in the coming weeks, which the long-term weather forecasts are not seeing at this time.

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