Wednesday, June 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. There are no major geopolitical flare-ups at present, while trader and investor risk aversion is not keen. That’s a scenario that should continue to support upside price action in most global stock markets.
In overnight news, the Euro zone’s April producer price index was reported up 1.0% from March and up 7.6% year-on-year. Those are numbers that are starting to fall in line with many analysts and economists who have been predicting inflationary price pressures will become more acute in the coming months.
Turkey’s president has called for lower interest rates, saying that reducing the burden of interest costs on producers would lead to lower inflation in the future. His call for an easing of monetary policy helped push the Turkish lira to a record low against the U.S. dollar Wednesday.
The key outside markets today see the U.S. dollar index higher on a corrective bounce from recent selling pressure. Nymex crude oil prices are higher and near the 2.5-year high hit on Tuesday, trading around $68.50 a barrel. At an OPEC meeting Tuesday the cartel said it would gradually ramp up its collective oil production and predicted a rise in global oil demand in the coming months. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.606%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Johnson Redbook weekly retail sales report, the IDB/TIPP economic optimism index, domestic auto industry sales and the Federal Reserve’s beige book.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading and not far from the recent record high. Bulls have the solid overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at the contract high of 4,228.25 and then at 4,250.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,181.00 and then at 4,150.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly 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 this week’s high of 13,761.00 and then at 13,804.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 13,582.50 and then at 13,500.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly up in early U.S. trading today. Bears have the overall near-term technical advantage. 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 early today. Shorter-term technical resistance is seen at 156 24/32 and then at 157 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 155 16/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up in early U.S. trading. 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 early today. Shorter-term resistance lies at 132.00.0 and then at last week’s high of 132.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.23.0 and then at 131.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are lower in early U.S. trading. The shorter-term moving averages for the Euro 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 Euro are bearish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2250 and then at the May high of 1.2292. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.2157 and then at 1.2100. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher and near this week’s a 2.5-year high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 this week’s high of $68.87 and then at $69.50. Look for sell stops just below technical support at $67.50 and then at this week’s low of $66.41. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are mixed to mostly firmer in early U.S. pre-market trading. Grain market bulls have made a strong recovery from recent selling pressure, to suggest last week that the markets put in near-term bottoms. I said last week that it’s going to take a serious weather market scare in the Corn Belt this summer to completely revive the grain market bulls. Well, the extended weather forecasts for through at least mid-June are calling for much warmer and drier weather conditions in much of the U.S. midsection, and that’s what has the grain market bulls stoked up this week.
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