Wednesday, June 24–Jim Wyckoff’s Morning Markets Report
European stock markets were down in overnight trading, while Asian bourses were mixed. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk sentiment is less upbeat at mid-week, amid a troublesome rise in Covid-19 infections in some parts of the world, including some U.S. states. This has intensified the debate on whether the rise in infections will result in a renewed lockdown of businesses that would mean further damage to recovering economies.
Gold prices hit a 7.5-year high overnight, on safe-haven demand amid the uptick in Covid cases recently and on notions the easy-money-infused major economies of the world are presently only on “sugar high” rebounds and a reckoning will occur down the road.
In other overnight news, Germany’s closely watched Ifo business sentiment index rose by a record amount in June, coming in at 86.2 from 79.7 in May. “German business sees light at the end of the tunnel,” said the Ifo report. This is just the latest piece of data suggesting major global economies are healing much faster than most economists had expected.
The important outside markets today see Nymex crude oil prices lower and trading around $40.00 a barrel. The U.S. dollar index is slightly up early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level. For perspective, the 10-year German government bond (the bund) is presently yielding -0.44%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the house price index, and the weekly DOE liquid energy stocks report. Also today the International Monetary Fund issues its world economic outlook report.
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U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage but trading has been sideways recently. 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 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 3,128.50 and then at this week’s high of 3,145.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Tuesday’s low of 3,060.00 and then at this week’s low of 3,027.25. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are weaker on profit taking after hitting a record high on Tuesday. 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 the overnight record high of 10,242.00 and then at Tuesday’s high of 10,296.25. On the downside, shorter-term support is seen at 10,000.00 and then at this week’s low of 9,843.50. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly up 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 neutral early today. Shorter-term technical resistance is seen at this week’s high of 178 1/32 and then at 178 14/32. Shorter-term support lies at the overnight low of 176 13/32 and then at 176 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly weaker 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 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 this week’s high of 138.30.5 and then at 139.03.0. Shorter-term technical support lies at 138.12.0 and then at 138.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is firmer in early U.S. trading. Bears have the overall near-term technical advantage. 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 even with the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 97.215 and then at this week’s high of 97.700. Shorter-term support is seen at this week’s low of 96.320 and then at 96.000. Wyckoff’s Intra Day Market Rating: 5.5
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. A price uptrend is 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $40.54 and then at this week’s high of $41.63. Look for sell stops just below technical support at $39.00 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 4.0
US grain futures are a bit firmer in early U.S. pre-market trading. Corn and soybean bulls are fading this week. Wheat bears are firmly in control. Grain market bulls need a weather market to soon develop in the U.S. Corn Belt. Otherwise, grain futures prices will languish at best, or trend down and set new for-the-move lows at worst.
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.