Daily Morning Report

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

OVERNIGHT DEVELOPMENTS

World stock markets were mixed overnight. U.S. stock indexes are also pointed toward narrowly mixed openings when the New York day session begins. Traders and investors worldwide are still jittery amid the U.S.-China trade dispute that shows no signs of ebbing. Conflicting comments from Trump administration officials on Monday, regarding sanctions against Chinese firms, only added more uncertainty to the matter.

China loosening its monetary policy this week has some in the marketplace wondering if the Chinese government is devaluing its currency, the yuan, in order to counter the negative impact of U.S. trade tariffs on China’s overall trade.

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

OVERNIGHT DEVELOPMENTS

World stock markets were mostly down overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. An escalating trade dispute between the U.S. and China—the world’s two largest economies—continues to rattle world markets. President Trump said during the weekend the U.S. may bar Chinese companies from investing in U.S. technology firms.

In overnight news, China’s central bank lowered its reserve requirement ratio for its banks by 0.5%, which is ostensibly a mild move to ease monetary policy.

The key “outside markets” today find the U.S. dollar index slightly up. Meantime, Nymex crude oil prices are higher and trading above $68.50 a barrel. The just-completed OPEC meeting that began Friday in Vienna, Austria saw cartel members raise their collective oil production by 1 million barrels a day, which the marketplace deemed bullish for crude oil.

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The U.S. dollar index is a basket of six major currencies weighted against the greenback. See on the daily bar chart for the USDX that prices are in a strong uptrend and just hit an 11-month high. The dollar bulls are in strong technical command to suggest still more upside price action in the near term, or longer. The stronger dollar is a bearish element for most of the raw commodity sector, given that most major raw commodities are priced in dollars on the world trade markets. An appreciating dollar makes those commodities more expensive to purchase in non-U.S. currency. Stay tuned!

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

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Corrective bounces are featured in the stock indexes after some very recent selling pressure.

In overnight news, it was quiet on the China-U.S. trade dispute front. Traders and analysts are waiting for the latest development in the seemingly escalating situation.

The Euro Zone’s Markit composite purchasing managers index (PMI) came in at 54.8 in June from 54.1 in May—the first increase in five months. A reading above 50.0 suggests growth in the sector.

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Thursday, June 21–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The specter of a global trade war is denting trader and investor confidence and is pressuring world stock and commodity markets.

In overnight news, the central banks of Switzerland and Norway held their regular monetary policy meetings. The Swiss National Bank kept its policy very easy with negative interest rates, while Norway’s central bank also kept its monetary policy unchanged, with its main interest rate at a very low 0.5%. The Bank of England is also holding its regular monetary policy meeting today.

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See on the daily bar chart for December corn futures that price action on Tuesday saw prices drop sharply to a contract low. However, by the end of the session prices had rebounded well off the low to close nearer the daily high. This extreme price action produced a bullish selling “exhaustion tail” on the daily chart, whereby the sellers became exhausted at lower price levels and prices immediately pushed back higher. Other grain markets also posted selling exhaustion tails on Tuesday. The price action Tuesday in the grains is a solid clue that those markets put in at least near-term lows, if not major lows. More strong selling pressure this week would negate those bullish chart clues seen on Tuesday, and be an ominous signal for grains in the coming months. But it’s my strong bias the grains have put in near-term market lows. Stay tuned!