Friday, June 28–Jim Wyckoff’s Morning Markets Report
Asian stock markets were mostly weaker overnight, while European stock indexes were mostly firmer. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.
Many markets are quieter and pausing amid the Group of 20 confab taking place in Japan that will feature a face-to-face meeting between U.S. President Trump and Chinese President Xi late Friday or this weekend. China has laid out several conditions for the U.S. to make a trade deal, but Trump may not accept them, including lifting sanctions on China telecommunications giant Huawei. The outcome of the U.S.-China summit meeting is still very uncertain and could have major implications for many markets come Monday morning.
In overnight news, the Euro zone June consumer price index came in at up 1.2%, year-on-year, which was in line with market expectations but still too low for the liking of the European Central Bank. This inflation report is one more element falling into the camp of the Euro zone monetary policy doves who want to see the ECB inject more stimulus into the economy.
The key “outside markets” today see Nymex crude oil prices near steady and trading around $59.50 a barrel. Meantime, the U.S. dollar index is modestly lower in early U.S. trading.
U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading today. Bulls have the solid overall near-term technical advantage. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,950.00 and then at the contract high of 2,967.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,914.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 early today. Shorter-term technical resistance is seen at 7,719.00 and then at 7,779.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 7,609.50 and then at 7,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls still 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 155 26/32 and then at this week’s high of 156 2/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 7/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are weaker in early U.S. trading. 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term support lies at the overnight low of 127.23.0 and then at 127.16.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 128.00.0 and then at the contract high of 128.08.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is modestly lower in early U.S. trading. 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 neutral early today. A bearish pennant or flag pattern has formed on the daily bar chart. The dollar index finds shorter-term technical resistance at this week’s high of 95.920 and then at 96.250. Shorter-term support is seen at this week’s low of 95.365 and then at 95.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
August Nymex crude oil prices are near steady in early U.S. trading. Bulls gained the overall near-term technical advantage. 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 $60.00 and then at $61.00. Look for sell stops just below technical support at $59.00 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures prices were mixed overnight. Corn is down around 1 1/2 cents, soybeans up around 1 to 2 cents and wheat down 3 to 4 cents. Friday is the day grain traders have been waiting on for weeks. Updated U.S. acreage and quarterly grain stocks reports from the Agriculture Department will be released at midsession.
Forecasts for U.S. corn seedings are for around 86.5 million acres compared to 92.792 million acres in the March USDA forecast. Soybean plantings are forecast at around 84.5 million acres compared to 84.617 million acres in USDA’s March forecast. All wheat seedings are forecast around 45.5 million acres compared to 45.754 million acres in USDA’s March estimate. The keen uncertainty surrounding today’s USDA numbers—especially corn and soybean acreage—will likely make for highly volatile trading in the wake of the reports. Trading today after the USDA data could help set the tone for the grain markets for much of the summer. U.S. Corn Belt weather has turned benign for corn and soybeans. Some drier and warmer conditions in the coming days will benefit the crops. Trading Monday morning will focus on the weekend U.S. and Chinese presidents meeting to discuss trade. Despite reports Chinese President Xi has laid out to the U.S. his terms for settling the dispute, notions are still widely mixed on the outcome of that meeting, which could have major implications for grain prices Monday morning.
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