Tuesday, June 20–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. However, slumping crude oil prices are limiting the upside for the global bourses. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Gold prices are trading near steady just before the U.S. Comex futures market opens. The gold market bulls have faded recently and need to show some fresh power soon to prevent significant near-term technical damage from occurring on the charts.
The world geopolitical front has heated up just a bit this week. A U.S. citizen held captive in North Korea for over a year and just returned home has died. A U.S. warplane shot down a Syrian jet, which has prompted a stern rebuke from Russia. While potentially market-sensitive at some point soon, these events have so far had little impact on the world marketplace.
The key “outside markets” on Tuesday morning see Nymex crude oil futures prices lower and hitting a 14-month low overnight. The oil market bears have the solid overall near-term technical advantage as prices are trading below $44.00 a barrel. There continue to be notions of a worldwide oil supply glut that will continue to depress prices for some time to come.
Meantime, the U.S. dollar index is near steady early today. The greenback bears still hold the overall near-term technical advantage as prices last week hit a seven-month low.
Several Federal Reserve officials speak this week and the marketplace will closely scrutinize their comments for any clues on the future direction of U.S. monetary policy. House Speaker Paul Ryan delivers a speech Tuesday afternoon on U.S. tax reform.
In overnight news, the Bank of England governor said low wage growth has delayed BOE interest rate increases despite an uptick in U.K. inflationary pressures.
U.S. economic data due for release Tuesday is again light and includes the weekly Goldman Sachs and Johnson Redook retail sales reports.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly higher in early U.S. trading, and not far below the contract and record high scored Monday. The bulls have the solid overall near-term technical advantage. There are no early chart clues that a market top is close at hand. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the contract high of 2,451.50 and then at 2,460.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,432.75 and then at last week’s low of 2,416.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index September futures: Prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 5,800.00 and then at 5,825.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,750.00 and then at 5,725.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher in early U.S. trading, and near last week’s contract high. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above 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 the contract high of 156 5/32 and then at 156 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 9/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are slightly up in early U.S. trading. Prices hit a contract high last week. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 126.20.0 and then at 126.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.11.5 and then at 126.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading. Bears still have the overall near-term technical advantage, but the index appears to have stabilized. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 97.500 and then at 97.800. Shorter-term support is seen at 97.000 and then at Monday’s low of 96.750. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
July Nymex crude oil prices are lower and hit a 14-month low in early U.S. trading. The bears have the solid overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $44.00 and then at the overnight high of $44.40. Look for sell stops just below technical support at the overnight low of $43.39 and then at $43.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
Grain futures markets were mixed. Weather in the U.S. Corn Belt has moderated. However, we are headed into the July Fourth holiday timeframe, at which time history shows that grain price trends can accelerate or reverse. My bias is that there will be more weather-market volatility in the grain markets in the coming weeks.