Tuesday, June 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly firmer and European shares mostly weaker. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins, after posting solid gains Monday.
The marketplace on Tuesday afternoon will closely scrutinize Federal Reserve Chairman Jerome Powell’s remarks to a House committee. Powell’s prepared text for today’s appearance on the coronavirus pandemic, released Monday afternoon, shows him reiterating the rise in inflation is transitory. Traders and investors will be watching the 2:00 p.m. EDT appearance for his replies to lawmakers’ questions. Powell is known to occasionally go “off-script” in his answers to questions.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures are weaker and trading around $72.65 a barrel after hitting a 2.5-year high of $73.36. overnight. Brent crude traded above $75.00 overnight amid signs global demand for energy continues to increase. Reports said Russia is considering proposing OPEC and its allies increase output at the next OPEC meeting on July 1, with the world oil market presently estimated to need an additional 3 million barrels a day to satisfy demand.
The yield on the benchmark U.S. Treasury 10-year note is presently fetching 1.502%.
U.S. economic data due for release Tuesday includes the weekly chain store sales index and the weekly Johnson Redbook retail report, existing home sales and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls have the firm overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,226.25 and then at the contract high of 4,258.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,200.00 and then at 4,175.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly firmer in early U.S. trading and not far below last week’s record high. 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 early today. Shorter-term technical resistance is seen at the contract high of 14,126.75 and then at 14,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Monday’s low of 13,983.75 and then at 13,900.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading after hitting a four-month high Monday. 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 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 early today. Shorter-term technical resistance is seen at 161 even and then at 162 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 159 16/32 and then at 159 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. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 18-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 132.16.0 and then at 132.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 132.00.0 and then at 131.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1942 and then at 1.2000. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.1867 and then at 1.1800. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading after hitting a 2.5-year high overnight. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $73.36 and then at $74.00. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are mixed to weaker in early U.S. pre-market trading. The weather in the U.S. Corn Belt has gotten cooler and wetter and that’s bearish. Recent price action suggests major market tops might be in place. Still, the historically hotter and drier months of July and August lie just ahead. Look for more fireworks in the grains in the next couple weeks, but right now the bears have momentum on their side.
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