Wednesday, June 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed and mostly flat in overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The global marketplace is calm at present, amid no major geopolitical flareups in play.
In overnight news, China reported a big jump in price inflation Wednesday, with its producer price index rising 9% in May, year-on-year, after a surge of 6.8% in April. China’s consumer price index was tamer, with a May reading of up 1.3%, year-on-year.
Traders are awaiting the U.S. economic data point of the week, which will be Thursday morning’s consumer price index report for May, which is expected to come in at up 0.5% from April and up 4.7%, year-on-year. Traders and investors continue their buzz regarding the prospects for inflation to heat up to uncomfortable levels in the coming months. Rising raw commodity prices the past few months are an ominous sign that inflation could become problematic.
Meantime, the European Central Bank holds its regular monetary policy meeting on Thursday.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly up and trading around $70.25 a barrel after hitting a 2.5-year high of $70.62 overnight. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.514%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and very close to the recent record high. 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. 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 the contract high of 4,228.25 and then at 4,250.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,180.00 and then at last week low of 4,155.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer in early U.S. trading. 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 neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 13,906.00 and then at 14,000.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Tuesday’s low of 13,733.00 and then at this week’s low of 13,685.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher and hit a more-than-three-month high in early U.S. trading today. Bulls are slowing gaining power and have started a price uptrend on the daily chart. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 158 20/32 and then at 159 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 157 26/32 and then at this week’s low of 156 31/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
September U.S. T-Notes: Prices are higher and hit a more-than-three-month high in early U.S. trading. Bulls have momentum amid a price uptrend in place on the daily chart. 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 bullish early today. Shorter-term resistance lies at 132.24.0 and then at 132.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.11.5 and then at this week’s low of 132.00.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The September Euro currency futures are slightly higher in early U.S. trading. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-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 this week’s high of 1.2225 and then at 1.2250. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.2168 and then at last week’s low of 1.2127. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading and hit a 2.5-year high overnight. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages are bullish early today as the 4-day is above the 9-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 the overnight high of $70.62 and then at $71.00. Look for sell stops just below technical support at the overnight low of $69.95 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading. It’s a weather market in the grains. The extended weather forecasts for through at least late-June are still calling for warmer and mostly drier weather conditions in much of the U.S. midsection. Expect more high daily volatility in the grain futures markets this week. Thursday comes the monthly USDA supply and demand report.
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