Wednesday, June 6–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. The U.S. stock indexes hit 2.5-month highs again today as traders and investors are in upbeat, risk-taking moods at present.
Italian government bond yields are on the rise again, amid some tensions arising from the formation of an anti-establishment political faction of government that wants to change the rules regarding Italy’s membership in the European Union.
In the latest news on the U.S.-China trade dispute, reports overnight said China has offered to buy $70 billion of U.S. farm, manufacturing and energy goods if the U.S. drops its import tariff plans.
India’s central bank raised its main interest rate by 0.25% Wednesday, to 6.25%, due to the prospect of rising inflationary pressures.
The key “outside markets” today find Nymex crude oil prices slightly weaker and trading just above $65.00 a barrel. The U.S. dollar index is weaker today on more of a corrective pullback from recent gains that last week pushed prices to a 10.5-month high.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, revised productivity and costs, the U.S. international trade report, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer and hit another 2.5-month high in early U.S. trading. The bulls have the overall near-term technical advantage and also have momentum on their side. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,762.00 and then at 2,775.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,733.25 and then at 2,711.25. 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 and hit another 11-week high in early U.S. trading. Prices are now within easy striking distance of the March contract high. 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 the March contract high of 7,240.00 and then at 7,275.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,200.00 and then at Tuesday’s low of 7,161.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls are fading again. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 143 11/32 and then at this week’s high of 143 31/32. Buy stops likely reside just above those levels. Shorter-term support lies at today’s low of 142 27/32 and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading, and bears have momentum again. 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 above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 119.21.5 and then at this week’s high of 119.27.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.08.9 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker again in early U.S. trading, on a normal downside correction. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above 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 93.410 and then at this week’s high of 93.860. Shorter-term support is seen at 93.000 and then at 92.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker in early U.S. trading. Bears have downside momentum to suggest more downside pressure in the near term. The shorter-term moving averages are bearish early today as the 4-day is below the 9- and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish today. Look for buy stops to reside just above technical resistance at this week’s high of $66.04 and then at $67.00. Look for sell stops just below technical support at $65.00 and then at this week’s low of $64.22. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were higher overnight on another corrective bounces from recent selling pressure. U.S. trade disputes and generally good growing weather in the U.S. Corn Belt at present are still bearish for the grains. However, a few forecasters are now calling for higher heat and lower-than-normal rainfall totals in the region for much of the remainder of June.