Tuesday, June 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight, as the recent selling pressure in technology stocks abated. The U.S. Nasdaq stock index is now showing early technical clues of topping out. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Gold prices are lower again in early U.S. trading. Bulls have faded just recently as a four-week-old uptrend has been negated.
Focus is on this week’s FOMC meeting that begins on Tuesday morning and ends Wednesday afternoon with a statement. The Federal Reserve is expected by many to slightly raise U.S. interest rates. Traders and investors are also keen to see if the Fed acts to further reduce its big balance sheet of government securities.
The Bank of Japan and the Bank of England also hold monetary policy meetings this week.
In overnight news, the closely watched German ZEW economic expectations index for June fell to 18.6 from 20.6 in May. A reading of 21.5 was expected for June.
The “outside markets” on Tuesday morning see Nymex crude oil futures prices slightly higher on tepid short covering. The oil market bears still have the firm overall near-term technical advantage as prices are well below $50.00 a barrel. Meantime, the U.S. dollar index is also slightly weaker. The greenback bears also hold the firm near-term technical advantage.
U.S. economic data due for release Tuesday includes the NFIB small business index, the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the producer price index.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are firmer in early U.S. trading. The bulls still have the strong near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the contract high of 2,443.50 and then at 2,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,412.50 and then at 2,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index September futures: Prices are higher in early U.S. trading. Recent price action scored a bearish “key reversal” down on the daily bar chart and a bearish weekly low close last Friday—both clues that a near-term market top is in place. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 Monday’s high of 5,750.50 and then at 5,775.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,700.00 and then at Monday’s low of 5,643.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are again slightly lower in early U.S. trading, on more profit taking after last week’s contract high. Bulls still have the firm overall near-term technical advantage. 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 154 1/32 and then at 154 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 153 19/32 and then at 153 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, on more profit taking after hitting a contract high last week. Bulls still have the firm overall near-term technical advantage. 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 resistance lies at the overnight high of 126.11.5 and then at this week’s high of 126.16.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 126.05.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading. Bears 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 above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.975 and then at last week’s high of 97.225. Shorter-term support is seen at the overnight low of 96.710 and then at 96.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are slightly higher in early U.S. trading, on tepid short covering. The bears still have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at Monday’s high of $46.71 and then at last week’s high of $47.42. Look for sell stops just below technical support at Monday’s low of $45.66 and then at last week’s low of $45.20. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were firmer overnight on a corrective bounce from selling pressure on Monday. Weather in the U.S. Corn Belt remains hot and mostly dry at present, but relief for the region is seen as cooler temps are forecast for later this week. Still, it’s only mid-June. My bias is that there will be more weather-market volatility in the grain in the coming weeks.