Daily Morning Report

See on the daily bar chart for December corn futures that prices are in a gentle uptrend. However, the market is languishing at lower price levels and will likely continue to do so without a significant weather scare developing in the Corn Belt this summer. More years than not, some degree of a weather market does occur in the grain futures during the planting and growing seasons. If you’d like to read my “Fear and Greed in a Weather Market” story I wrote a few years back, I’d be happy to email it to you. Just send me an email at jim@jimwyckoff.com.–Stay tuned! Jim

Friday, June 19–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Recent, surprisingly upbeat economic data from the U.S. and other countries continue to stoke trader and investor confidence and risk appetite. And there are perceptions that central banks are at the ready with even more monetary stimulus should the need arise.

Friday is quadruple-witching day in the U.S. stock market, whereby stocks, stock options, options on futures and stock index futures contracts expire. History shows these days can produce higher volatility in the stock market.

Lingering in the background of the marketplace at present is the inflammatory rhetoric coming out of North Korea, including that rogue nation blowing up a building near its border with South Korea. Don’t be surprised if this becomes a front-burner marketplace matter in the coming weeks or few months.

Nymex crude oil prices pushed above $40 Friday morning, providing another clue that this important outside market has recovered from its April meltdown and that world economies will recover faster than expected. The other key outside markets early today see the U.S. dollar index near steady. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.73% level.

U.S. economic data due for release Friday is light and includes international transactions and the current account. Several Federal Reserve officials are slated to give speeches today.

–Jim
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U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls this week have recovered well from last week’s sell off and working to restart a price uptrend. 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 bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,156.25 and then at 3,177.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,094.75 and then at Thursday’s low of 3,064.50. Wyckoff’s Intra-day Market Rating: 6.0

September Nasdaq index futures: Prices are higher in early U.S. trading as the bulls are also recovering well from late last week’s price pressure and are very close to the recent 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 bullish early today. Shorter-term technical resistance is seen at the record high of 10,140.00 and then at 10,250.00. On the downside, shorter-term support is seen at the overnight low of 9,979.75 and then at 9,800.00. Wyckoff’s Intra-Day Market Rating: 6.5.

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 above the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 177 7/32 and then at 178 even. Shorter-term support lies at Thursday’s low of 175 30/32 and then at this week’s low of 174 29/32. Wyckoff’s Intra-Day Market Rating: 4.0

September U.S. T-Notes: Prices are down in early U.S. trading. Bulls still have the solid 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 resistance lies at Thursday’s high of 138.28.0 and then at 139.00.0. Shorter-term technical support lies at Thursday’s low of 138.16.0 and then at this week’s low of 138.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly up in early U.S. trading. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 97.550 and then at 98.000. Shorter-term support is seen at 97.000 and then at 96.765. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

July Nymex crude oil prices are higher in early U.S. trading. A price uptrend on the daily chart appears to be restarting. 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 bullish early today. Look for buy stops to reside just above technical resistance at the June high of $40.44 and then at $45.00. Look for sell stops just below technical support at the overnight low of $38.76 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 6.5

GRAINS

US grain futures are firmer in early U.S. pre-market trading, on short covering. Bulls have stabilized the corn and soybean markets this week but wheat prices have seen serious technical erosion—so much so that corn and soybeans will find it hard to sustain rallies, too. Grain market bulls need a weather market to develop in the U.S. Corn Belt and the clock is ticking as the most critical part of the growing season approaches for corn—early July.

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 18–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Risk appetite may be receding a bit late this week as Covid-19 cases in many U.S. states are on the rise, prompting concerns those states may have to once again impose restrictions on their businesses and the public. Reports said the second wave of the pandemic outbreak in Beijing, China has been quickly contained but other countries are seeing the virus spread.

Said one market analyst in a morning email dispatch, some of which has been edited for clarity: “Covid-19 and the Fed’s (and other central banks’) actions are influencing a herd mentality to financial markets where rational risk and reward calculations are no longer in place. The first sign of trouble sees investors flee to safe havens, and when the Fed plays the put (put option, meaning adding more stimulus), traders take the opposite side of the trade. This kind of environment will keep volatility heightened in the near term. In my opinion, the problem that the Fed and other central banks have caused over the past couple of months is that retail investors are bidding up some of the worst-performing companies just because they believe the current policies will keep them afloat…. This is leading to the creation of a big bubble in asset prices and the further it grows, the more damage it will make when it bursts.”

The important outside markets early today see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are slightly up and trading around $38.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.71% level.

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

–Jim
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See on the daily bar chart for the September Euro currency futures that a price uptrend has at least temporarily stalled out. This could be a normal pause before the uptrend resumes, but the bulls need to step up and show some good power soon to suggest the recent price action is just a pause in the uptrend. More significant downside price action in the near term would kill the uptrend.–Stay tuned! Jim

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

Global stock markets were mostly up a bit in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are weighing the bullish aspects of generally faster rebounds in world economies than many had expected versus the bearish element of a resurgence in Covid-19 reported cases in some regions of the globe, including some U.S. states. At present, it appears the global economic growth factor is winning out. Skeptics can argue the rally in world stock markets is mainly due to the floods of central-bank infused cash that have hit the global financial system.

In overnight news, the Euro zone May consumer price index came out at -0.1% from April and up 0.1%, year-on-year. Deflationary concerns are still at the forefront for central bankers. However, a Wall Street Journal article at mid-week is headlined “Few Are Prepared for the Risk of Inflation Era After Recession.” The story says the 2008 financial crisis and the big influx of central bank liquidity into the financial systems then produced no problematic inflation. However, the article says things are different now and at present “the markets may have it completely wrong” on the inflation matter.

There are a couple of geopolitical developments that bear watching. North Korea has ramped up its provocation of South Korea in recent days. Also, a clash between Indian and Chinese soldiers in their border region is the first military conflict between the two nations in decades.

Fed Chairman Jerome Powell on Wednesday offers up his second and final day of testimony to the U.S. Congress on the health of the U.S. economy and its recovery prospects—today to a House of Representatives panel. His comments to a Senate committee on Tuesday produced no significant surprises.

The important outside markets early today see the U.S. dollar index firmer. Meantime, Nymex crude oil prices are lower and trading around $38.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.75% level.

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

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

Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The U.S. stock indexes on Monday made a strong recovery from sharp early-day losses, due in part to the Federal Reserve announcing it has started buying corporate bonds, in an extension of an existing program that had only purchased corporate bond exchange traded funds. Reports also said the Trump administration is planning to spend $1 trillion on U.S. infrastructure improvements.

There is growing agreement the Federal Reserve will continue to deploy more firepower to support the U.S. economy. Such is ultimately bearish for the U.S. dollar as the U.S. government’s debt obligations continue to bulge. The U.S. dollar index is presently in a steep downtrend on the daily bar chart.

The U.S. economic highlight of the week will be Fed Chairman Jerome Powell’s two days of congressional testimony on Tuesday and Wednesday for his semi-annual economic report to Congress. He may provide more clarity and perspective on the Fed’s bond buying and other monetary policy moves. Traders will monitor to see if his comments expand on his sober assessment of the U.S. economy last week.

In other news, North Korea is ramping up its bellicose activities, as it blew up a meeting facility with South Korea that was just inside the North Korean border. Many look for North Korea to become more provocative with the U.S. as the U.S. presidential election approaches in November.

The important outside markets early today see the U.S. dollar index a bit weaker. Meantime, Nymex crude oil prices are higher and trading around $37.75 a barrel. The International Energy Agency said Tuesday global oil demand in 2020 will decline by 8.1 million barrels per day. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.75% level.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, retail sales, industrial production and capacity utilization, the NAHB housing market index, and manufacturing and trade inventories.

–Jim
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