Tuesday, June 25–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Many markets are in a pause mode, awaiting fresh news on the geopolitical front.
The U.S.-Iran tensions in the Persian Gulf region continue to simmer near the front burner. President Trump said Monday there will be major new sanctions put in Iran and called the country the world’s number-one sponsor of terrorism. Traders and investors are wondering how Iran will respond, and if Iran is itching for a military confrontation with the U.S. Trump appears unwilling to start a fight, but he also will not likely stand by idly while being provoked. This situation is likely to linger for quite a while and will likely get worse before it gets better.
Meantime, U.S. President Trump and Chinese President Xi are scheduled to meet in Japan at the G20 meetings late this week—possibly after all the markets are closed on Friday– and discuss their ongoing trade war. The outcome of that meeting is uncertain and could have huge implications for many markets, especially if an agreement is reached to end the trade war. Many reckon a final deal will not be announced this week, but instead the two countries will likely say they’ve made some progress and will keep talking.
Gold prices are sharply up again Tuesday and hit a six-year high on safe-haven demand amid geopolitics in play, and on a slumping U.S. dollar index.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $57.50 a barrel. Meantime, the U.S. dollar index is slightly up on a mild corrective bounce after hitting a three-month overnight.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the monthly house price index, the S&P/CoreLogic house price index, the Richmond Fed business survey, the consumer confidence index and new residential sales. Several Federal Reserve Board officials are also scheduled to speak today.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly down but still close to this year’s high scored on Friday. Bulls have the solid overall near-term technical advantage to suggest still more upside. 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 2,969.25 and then at 2,985.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,930.00 and then at 2,915.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are weaker in early U.S. trading and not too far below this year’s high. Bulls have the solid overall near-term technical advantage to suggest still more upside. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 7,779.50 and then at last week’s high of 7,821.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,692.75 and then at 7,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage to suggest more upside. 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 early today. Shorter-term technical resistance is seen at the overnight high of 156 even and then at the contract high of 156 17/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 9/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are firmer 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 early today. Shorter-term support lies at the overnight low of 127.28.5 and then at 127.20.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 128.06.0 and then at the contract high of 128.08.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly up but hit another three-month low overnight. Bears have downside momentum. 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 this week’s high of 95.715 and then at 96.000. Shorter-term support is seen at the overnight low of 95.365 and then at 95.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
August Nymex crude oil prices are weaker in early U.S. trading, on profit taking from recent gains. Bulls still have some momentum to suggest more upside in the near term. 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $58.22 and then at $59.00. Look for sell stops just below technical support at $57.00 and then at this week’s low of $56.75. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures prices were higher overnight, with corn around 5 cents higher, soybeans up around 6 cents and wheat 4 to 5 cents higher. USDA crop progress reports out Monday afternoon showed U.S. corn planting at 98% complete versus 92% last week and 100% last year. The corn condition rating was at 57% good to excellent versus 59% last week. Soybean planting was pegged at 85% as of Sunday, which was less than expected and compares to 77% planted last week and 100% last year at this time. The grain markets are likely to be quieter until late this week. Friday sees the updated U.S. acreage and quarterly grain stocks report from the Agriculture Department. Friday’s acreage report will be one of the most important grain market reports of the year, due to the uncertainty surrounding it. Grain traders are keenly uncertain on corn and soybean planted acres numbers. U.S. Corn Belt weather still slightly favors the bulls. Rainy and stormy conditions are forecast for the U.S. Midwest much of this week, but a drier pattern for the weekend. However, now the corn and soybeans that have not been planted very likely will not be even if conditions do dry out in the Midwest. Also late this week—possibly Saturday– the U.S. and Chinese presidents meet to discuss trade. Ideas are widely mixed on the outcome of that meeting, which could have major implications for grain prices.
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