Monday, June 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down in overnight trading. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. Traders and investors are risk averse to start the work week, as there are growing signs that the Covid-19 pandemic is making a resurgence. Reports said parts of Beijing are on lockdown again, with cases in some U.S. states also on the rise as businesses reopen and American citizens become more lax on social distancing. Reported cases in the U.S. have now risen above 2 million.
There are also growing notions that the global stock market rebounds have come too far, too fast, given the actual economic conditions in the major industrialized countries at present. The general and even many in the investing public are asking, “How could the Nasdaq stock index hit a record high last week when U.S. unemployment has surged to around 15% and much of the economy remains crippled?”
The U.S. economic highlight of the week will be Fed Chairman Jerome Powell’s two days of congressional testimony on Tuesday and Wednesday for his semi-annual economic report to Congress. He may provide more clarity on the Fed’s bond buying and other monetary policy moves. Traders will monitor to see if his comments expand on his sober assessment of the U.S. economy last week.
In other overnight news, Euro zone April exports were reported down 24.5% and imports were down 13%.
The important outside markets early today see the U.S. dollar index weaker. The greenback remains in a steep downtrend. Meantime, Nymex crude oil prices are lower and trading around $35.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
U.S. economic data due for release Monday includes the Empire State manufacturing survey and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are solidly lower and hit a three-week low in early U.S. trading. Bulls are fading fast as a price uptrend on the daily bar chart has stalled out. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 3,000.00 and then at 3,050.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 2,950.00 and then at the overnight low of 2,923.75. Wyckoff’s Intra-day Market Rating: 3.5
September Nasdaq index futures: Prices are solidly lower in early U.S. trading as the bulls are fading. A price uptrend on the daily chart is now in jeopardy. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 9,585.50 and then at 9,700.00. On the downside, shorter-term support is seen at the overnight low of 9,368.25 and then at this week’s low of 9,300.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls are back in business. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 178 14/32 and then at 179 even. Shorter-term support lies at the overnight low of 177 9/32 and then at Friday’s low of 176 22/32. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 139.03.0 and then at 139.10.0. Shorter-term technical support lies at the overnight low of 138.23.5 and then at 138.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is lower in early U.S. trading. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 97.465 and then 98.000. Shorter-term support is seen at 97.000 and then at 96.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are lower in early U.S. trading. Bulls are fading as a price uptrend has stalled out. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $37.00 and then at $38.00. Look for sell stops just below technical support at $35.00 and then at the overnight low of $34.36. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are weaker in early U.S. pre-market trading. Risk aversion in the world marketplace is pressure in the grains to start the week. Weather in the U.S. Midwest is still overall bearish and crop conditions are good. There are some long-range forecasts calling for drier and warmer weather, but rain is expected in parts of the Corn Belt by the end of this week. Bulls need a weather market in the U.S. Midwest to develop. More years than not, one does develop in the summer, to some degree.
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