Tuesday, June 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Stock markets are at present seemingly ignoring major storm clouds churning, including the Covid-19 pandemic that has severely crippled world economies, a looming “cold war” between the two largest economies in the world—the U.S. and China, and civil unrest in the U.S. that has exploded into violence not seen in over 50 years. Many market watchers are reckoning the strength of world stock markets is mainly due to the enormous injection of monetary stimulus by central banks into economies that sees much of that money flowing into equities. The juxtaposition of a rallying Wall Street and a struggling Main Street could have significant political implications down the road.
In other news, the U.S. Congressional Budget Office said a full U.S. economic recovery from the damage caused by the pandemic could take 10 years.
The important outside markets see the U.S. dollar index lower early today and hitting another 2.5-month low overnight. The greenback is in a swoon due in part to the civil unrest in America. Currencies in countries that are more outside the present fray are benefitting, including the Australian and Canadian dollars and the British pound. Nymex crude oil prices are higher and trading around $36.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.68%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the ISM New York report on business and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher and hit a nearly three-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 3,075.00 and then at 3,100.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,024.50 and then at this week’s low of 2,999.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher and hit a 13-week high in early U.S. trading. A price uptrend is firmly in place on the daily chart. 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 bullish early today. Shorter-term technical resistance is seen at the February high of 9,765.25 and then at 9,800,00. On the downside, shorter-term support is seen at the overnight low of 9,540.00 and then at this week’s low of 9,437.25. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls have the overall technical advantage but trading has been sideways and choppy at higher levels for several weeks. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 178 1/32 and then at this week’s high of 178 26/32. Shorter-term support lies at the May low of 176 10/32 and then at 176 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls have the solid overall near-term technical advantage but trading has been choppy and sideways at higher levels for weeks. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 139.03.5 and then at this week’s high of 139.07.5. Shorter-term technical support lies at this week’s low of 138.25.0 and then at 138.20.0. 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 lower and hit a 2.5-month low in early U.S. trading. Bears have good downside momentum. The shorter-term moving averages for the dollar index 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 dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 97.875 and then at this week’s high of 98.290. Shorter-term support is seen at the overnight low of 97.395 and then at 97.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are solidly higher in early U.S. trading and hit an 11-week high overnight. A price uptrend remains in place on the daily bar chart and the bulls still have upside momentum. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $37.00 and then at $38.00. Look for sell stops just below technical support at the overnight low of $35.28 and then at $35.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are narrowly mixed in early U.S. pre-market trading. Focus this week is on the deteriorating U.S.-China relations that are very likely to reduce China’s purchases of U.S. ag products. Bulls need a weather market in the U.S. Midwest to develop. While so far very good early-season planting and growing weather has been seen for the U.S. corn, soybean and wheat crops, long-range forecasts for the month of June are calling for warmer and drier than normal conditions for much of the U.S. Midwest.
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