Thursday, June 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. stock index bears are still enjoying the firm overall near-term technical advantage, as risk appetite in the marketplace is not robust.
In overnight news, the Euro zone reported its April producer price index was up a stunning 37.2%, year-on-year. Most of that was rising energy costs, but excluding energy the PPI was still up 15.6% annually.
Traders are awaiting Friday morning’s U.S. employment situation report for May, which is expected to show the key non-farm jobs number at up 328,000, after a rise of 428,000 reported in April. The U.S. unemployment rate is expected to be 3.5% versus 3.6% reported in April.
The key outside markets today see Nymex crude oil prices lower and trading around $112.50 a barrel. An OPEC-plus meeting today will be closely monitored. The cartel is expected to raise its collective oil production, and may sanction Russian oil. The U.S. dollar index is lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.915%.
It’s a busy day for U.S. economic data released Thursday, including the Challenger job-cuts report, the ADP national employment report, the weekly jobless claims report, revised productivity and costs, manufacturers’ shipments and inventories, the weekly DOE liquid energy stocks report and monthly chain store sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at Wednesday high of 4,168.25 and then at this week’s high of 4,204.75. Support for active traders is seen at this week’s low of 4,074.25 and then at 4,044.25. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 Wednesday’s high of 12,851.00 and then at this week’s high of 12,912.25. On the downside, shorter-term support is seen at this week’s low of 12,487.00 and then at 12,350.00. 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. Bears are in overall near-term technical control. 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 bearish early today. Shorter-term technical resistance is seen at 139 16/32 and then at Wednesday’s high of 140 even. Shorter-term support lies at this week’s low of 138 6/32 and then at 138 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer in early U.S. trading. Bears are in overall near-term technical control. 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 bearish early today. Shorter-term resistance lies at 119.00.0 and then at Wednesday’s high of 119.16.5. Shorter-term technical support lies at this week’s low of 118.16.5 and then at 118.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are firmer in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.0803 and then at this week’s high of 1.0853. Shorter-term support is seen at this week’s low of 1.0693 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are solidly lower in early U.S. trading. 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 $113.50 and then at $115.00. Look for sell stops just below technical support at $111.00 and then at $110.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were firmer in early U.S. pre-market trading, on corrective bounces from this week’s strong selling pressure. Grain market bulls are on the ropes. Technical odds are strong that prices during June will grind sideways to lower. Then, after the Fourth of July U.S. holiday, prices may pivot, depending on the weather. More years than not there is some degree of a weather scare in the grain markets. If you’d like to read my feature story on trading the grains in a weather market, just send me an email at jim@jimwyckoff.com and I’ll forward it to you.
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