Wednesday, June 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Today is the last trading day of the month and of the quarter, which makes it an extra important trading day from a technical perspective.
The U.S. economic data point of the day is the ADP national employment report for June, which is seen coming in at up around 550,000 jobs. That report is a precursor to Friday morning’s employment situation report for June from the Labor Department—arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 700,000 compared to a rise of 559,000 in May. The unemployment rate is seen at 5.6% versus 5.8% in May.
In overnight news, the Eurozone consumer price index for June came in at up 1.9%, year-on-year, versus a rise of 2.0% in May.
Meantime, China’s official purchasing managers index fell to 50.9 in June from 51.0 in May. A reading above 50.0 suggests growth in the sector.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil futures are higher and trading around $73.75 a barrel. Energy traders are awaiting Thursday’s OPEC meeting. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.465%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the Chicago ISM business survey, pending home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading and not far below this week’s contract and 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 to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 4,291.00 and then at 4,300.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,253.50 and then at 4,231.75. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly lower in early U.S. trading and poked to another contract and record high overnight. 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 contract high of 14,598.50 and then at 14,700.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,400.00 and then at this week’s low of 14,333.25. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. A price uptrend is in place on the daily chart and bulls 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 below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 161 even and then at 161 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 160 even and then at Tuesday’s low of 159 15/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 132.16.0 and then at 132.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.06.0 and then at 132.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1963 and then at last week’s high of 1.1994. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1895 and then at the June low of 1.1867. 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 in early U.S. trading and near this week’s 2.5-year high of $74.45. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at $74.45 and then at $75.00. Look for sell stops just below technical support at the overnight low of $72.82 and then at this week’s low of $71.97. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures are mostly weaker in early U.S. pre-market trading. The weather market in the grains may be reigniting as the calendar turns to July on Thursday and weather forecasts for the Midwest are mostly hot and dry. Trading may be quieter this morning ahead of the very important USDA acreage and stocks reports. Look for active trading after those reports come out at 12:00 noon EDT. Those reports typically cause high volatility in their immediate aftermath.
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