Wednesday, June 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European shares mostly down and Asian shares mostly up. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. indexes are still a bit wobbly but have shown technical signs that near-term market bottoms are in place. However, bulls have not shown the power to start near-term price uptrends.
In overnight news, the Euro zone revised first-quarter GDP was reported up 0.6% from the fourth quarter versus the last estimate of up 0.3%. Year-on-year, 1Q GDP was up 5.4% versus the last estimate of up 5.1%.
The World Bank has lowered its growth forecast for the global economy this year to 2.9% from a January prediction of up 4.1% and April’s 3.2% estimate. The Bank warned that several years of above-average inflation and below-average growth lie ahead.
Two key data points of the week are the European Central Bank’s regular monetary policy meeting Thursday, at which the central bank is expected to lay out plans for tightening its monetary policy. On Friday the U.S. consumer price index report for May is set for release. The CPI is expected to be up 8.2%, year-on-year, after a rise of 8.3% in April.
The key outside markets today see Nymex crude oil prices higher and trading around $121.00 a barrel. The U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.004%. For perspective, the German 10-year bund is yielding 1.316% and the 10-year U.K. gilt is yielding 2.241%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are a bit lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,170.75 and then at last week’s high of 4,204.75. Support for active traders is seen at this week’s low of 4,078.25 and then at 4,050.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 12,838.75 and then at last week’s high of 12,973.75. On the downside, shorter-term support is seen at this week’s low of 12,442.25 and then at 12,250.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in firm overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 138 15/32 and then at 139 even. Shorter-term support lies at this week’s low of 136 8/32 and then at 136 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bears are in firm overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at this week’s high of 118.23.5 and then at 119.00.0. Shorter-term technical support lies at this week’s low of 117.22.5 and then at 117.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
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 neutral early today, as the 4-day is even with the 9-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 this week’s high of 1.0816 and then at last week’s high of 1.0853. Shorter-term support is seen at this week’s low of 1.0715 and then at last week’s low of 1.0693. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $121.37 and then at $122.50. Look for sell stops just below technical support at the overnight low of $119.30 and then at Tuesday’s low of $117.14. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading. Bulls have regained power this week to suggest a sideways, trading-range grind for the month of June. Traders are looking ahead to Friday morning’s monthly USDA supply and demand report.
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