Tuesday, June 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading, on this last day of the month and of the second quarter. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Risk appetite has receded a bit recently amid the Covid-19 resurgence in many countries, including the U.S., where several hotspot states are starting to shut down businesses again.
U.S. Federal Reserve Chairman Jerome Powell will testify to a congressional committee today. In prepared remarks, he said the U.S. economy has rebounded faster than expected from Covid-19 damage to businesses, but also said there are still challenges, most notably keeping the pandemic contained. U.S. Treasury Secretary Steven Mnuchin will also testify to the House committee today.
In overnight news, China’s government put into effect its so-called national security law to tighten its grip on Hong Kong. Meantime, there is a brewing geopolitical rift between the U.S. and Russia after reports surfaced that Russia offered the Taliban bounties to kill U.S. soldiers.
It’s a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%.
The important outside markets today see Nymex crude oil prices weaker and trading around $39.00 a barrel. The U.S. dollar index is firmer early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.63% level.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P Core Logic Case Shiller home indexes, the ISM Chicago business survey, the consumer confidence index.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. Bulls still have the overall near-term technical advantage. The 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 is below 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 overnight high of 3,059.25 and then at 3,082.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Monday’s low of 2,983.50 and then at 2,950.00. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls remain in firm overall technical control. 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 10,028.25 and then at 10,120.50. On the downside, shorter-term support is seen at 9,900.00 and then at Monday’s low of 9,728.75. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. Bulls still have some upside momentum. 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 the overnight high of 179 13/32 and then at 180 even. Shorter-term support lies at Monday’s low of 178 24/32 and then at 178 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls have the solid near-term technical advantage as prices trade sideways at higher levels. 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 resistance lies at Monday’s high of 139.13.5 and then at 139.16.0. Shorter-term technical support lies at 139.02.5 and then at 138.26.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
The September Euro currency futures are weaker in early U.S. trading. Bulls have the slight overall near-term technical advantage but have faded a bit as trading has been choppy. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1270 and then at Monday’s high of 1.1307. Shorter-term support is seen at the overnight low of 1.1216 and then at the June low of 1.1189. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
August Nymex crude oil prices are weaker in early U.S. trading. A price uptrend is still barely in place on the daily chart but it may be rolling over. 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 $40.00 and then at $41.00. Look for sell stops just below technical support at $38.00 and then at last week’s low of $37.08. Wyckoff’s Intra-Day Market Rating: 4.5
US grain futures are mixed in early U.S. pre-market trading. Grain market bears are still firmly in control. Today there are major USDA reports out—U.S. acreage updates and quarterly grain stocks data. The only thing that will rescue the bulls is a weather market developing in the U.S. Corn Belt in the coming weeks. Now the longer-term outlooks are warming up and drier, which the bulls are watching closely.
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.