Tuesday, June 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly weaker overnight and U.S. stock indexes are also pointed toward slightly lower openings when the New York day session begins. There is a bit of risk aversion in the marketplace early this week, ahead of key events later this week. Also, with many stock indexes around the world at or near record or multi-year highs, there is some normal profit-taking occurring.
Gold prices are solidly higher and hit a six-week high overnight. Prices are now within easy striking distance of the key $1,300.00 level. Other safe-haven assets like U.S. Treasuries and the Japanese yen are also seeing keener buying interest early this week.
Traders and investors are looking ahead to important marketplace events in the coming days, including general elections in the U.K., a European Central Bank meeting, and former FBI director Comey’s testimony to the U.S. Congress, all on Thursday, and the Federal Reserve’s FOMC meeting next week.
Nymex crude oil futures prices are slightly lower in early U.S. trading. The oil market bears have the firm overall near-term technical advantage and prices are now well below $50.00 a barrel. The other “outside market” on Tuesday morning finds the U.S. dollar index slightly lower and hitting a six-month low overnight. The greenback bears are also in firm near-term technical control as dollar index prices are in a three-month-old downtrend.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly lower in early U.S. trading after hitting a contract and record high last Friday. The bulls have the strong near-term technical advantage. There are no early technical clues that a market top is close at hand. 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 bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,437.00 and then at 2,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,408.00 and then at 2,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index September futures: Prices are slightly lower in early U.S. trading on profit taking after hitting a record and contract high on Monday. Bulls have the strong overall near-term technical advantage and there are no early chart clues a market top is close at hand. 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 bearish early today. Shorter-term technical resistance is seen at the contract high of 5,897.75 and then at 5,920.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,865.00 and then at 5,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher in early U.S. trading, on safe-haven demand. Prices are near last week’s contract high. Bulls have the firm 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 and 18-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 contract high of 155 7/32 and then at 155 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 154 11/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading and near the recent contract high. Bulls have the solid 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the contract high of 126.25.5 and then at 130.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.14.0 and then at 126.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is weaaker in early U.S. trading and hit another six-month low overnight. Bears have the firm overall near-term technical advantage. 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 Monday’s high of 96.700 and then at 97.000. Shorter-term support is seen at the overnight low of 96.285 and then at 96.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are slightly lower in early U.S. trading. The bears have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at Monday’s high of $48.42 and then at $49.00. Look for sell stops just below technical support at last week’s low of $46.74 and then at $46.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were mixed to firmer overnight. Trading remains choppy in corn, but the bulls have just a bit of momentum. Soybeans and wheat are still firmly bearish. Weather in the U.S. Corn Belt remains mostly non-threatening at present. However, there is little rain and hot temperatures forecast for the region later this week, which could become a bullish element soon. It’s going to take a weather scare in the U.S. Corn Belt to jumpstart any significant rallies in the grains in the coming weeks. The odds are good that a weather scare will develop in the next six weeks.