Monday, June 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed and choppy in overnight trading. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Trader and investor risk appetite continues to pull back as the Covid-19 pandemic continues to spread in many countries. News headlines to start the trading week highlight the pandemic’s worldwide death toll has passed 500,000 and the total number of reported cases is above 10 million. In a grim markets assessment, one research analyst this morning said in an email dispatch: “Hopes of a robust economic recovery following the pandemic are now shattered. The risks of re-imposing lockdowns are high and monetary policy stimulus which explains most of the recovery in asset prices from the March lows will become less effective going forward if it doesn’t translate into a rebound in economic activity and better prospects for corporate earnings. Risk asset valuations remain elevated and the next few weeks ahead will tell us whether they will continue to hold or get bumped.”
Gold prices continue to benefit from safe-haven demand amid the resurgence of Covid infections and the potential for further damage to global economies.
It’s a holiday-shortened U.S. trading, 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 slightly weaker and trading around $38.50 a barrel. The U.S. dollar index is lower early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.7% level.
U.S. economic data due for release Monday includes pending home sales and the Texas manufacturing outlook survey.
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading. 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 3,050.00 and then at Friday’s high of 3,082.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight 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 modestly weaker up in early U.S. trading. Bulls remain in 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 10,000.00 and then at Friday’s high of 10,120.50. On the downside, shorter-term support is seen at the overnight low of 9,780.25 and then at 9,700.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly down in early U.S. trading after hitting a five-week high overnight. 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 overnight high of 179 13/32 and then at 180 even. Shorter-term support lies at 178 16/32 and then at 178 even. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are slightly down in early U.S. trading after hitting a six-week high overnight. Bulls still 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 the overnight high of 139.09.5 and then at 139.13.5. Shorter-term technical support lies at 139.00.0 and then at Friday’s low of 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 solidly up in early U.S. trading. Bulls have the overall near-term technical advantage but trading has been choppy. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.1325 and then at 1.1347. Shorter-term support is seen at the overnight low of 1.1236 and then at 1.1210. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
August Nymex crude oil prices are near steady in early U.S. trading. A price uptrend is still in place on the daily chart but it may now be rolling over. The shorter-term moving averages are neutral early today as the 4-day is even with 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 $39.00 and then at $40.00. 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: 5.5
US grain futures are mixed in early U.S. pre-market trading. Grain market bears are still firmly in control to suggest sideways to lower price action in the near term. Corn is likely to be the market leader in the near term. The only thing that will rescue the bulls is a weather market developing in the U.S. Corn Belt in the coming weeks, which most long-term weather forecasts are not seeing at this time. Remember, however, that summertime weather forecasts in the U.S. Corn Belt can and do “change on a dime.”
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.