Wednesday, June 20–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were firmer overnight and U.S. stock indexes are also pointed higher openings when the New York day session begins. While the U.S. and China have threatened each other with trade import tariffs, and the situation has escalated this week, many still believe the two largest economies of the world will find a compromise to avoid a full-blown trade war. That’s the thinking of the marketplace today, anyway.
The key “outside markets” today find the U.S. dollar index slightly higher and hitting another 11-month high overnight. Meantime, Nymex crude oil prices are firmer and trading just above $65.00 a barrel. Oil traders are looking ahead to the late-week OPEC meeting, at which time Saudi Arabia and Russia are expected to announce they will increase oil production.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. The bulls still have the 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. 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 2,786.75 and then at last week’s high of 2,796.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,757.25 and then at this week’s low of 2,735.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index December futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are still 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 to bullish early today. Shorter-term technical resistance is seen at 7,300.00 and then at the contract high of 7,321.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,226.75 and then at 7,200.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-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 144 11/32 and then at this week’s high of 144 25/32. Buy stops likely reside just above those levels. Shorter-term support lies at 143 23/32 and then at this week’s low of 143 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 119.30.0 and then at this week’s high of 120.06.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.21.0 and then at this week’s low of 119.18.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is higher and hit another contract and 11-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 the overnight contract high of 94.985 and then at 95.250. Shorter-term support is seen at 94.500 and then at this week’s low of 94.175. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $65.52 and then at $66.00. Look for sell stops just below technical support at $64.23 and then at this week’s low of $63.40. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were firmer overnight on short covering and bargain hunting from the sharp losses seen this week. Trade worries and very good growing weather in the U.S. Corn Belt are bearish. It’s still my bias the corn and soybean markets have put in market bottoms. Tuesday’s price action—strong losses early and then a rebound well off daily lows by the close—suggests the sellers are now fully exhausted.