Wednesday, June 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly steady to firmer overnight. U.S. stock indexes are also pointed toward slightly higher openings when the New York day session begins.
Gold prices are moderately lower in pre-U.S.-session trading, on a downside correction after good gains on Tuesday pushed prices to a seven-week high.
Terror attacks in Iran Wednesday, including on its parliament, have not had a significant impact on the world marketplace. ISIS has claimed responsibility for the attacks.
Important and likely markets-moving events are on tap late this week. On Thursday there are general elections in the U.K., a European Central Bank meeting, and former FBI director James Comey testifies to the U.S. Congress. That should make for an active and potentially volatile day in many markets. Next week, the Federal Reserve’s FOMC meets, at which time it is expected the Fed will slightly raise U.S. interest rates.
There is also a bit of uneasiness in the marketplace about the Trump administration that continues to be embroiled in controversy, particularly regarding alleged ties to the Trump team and the Russian government involving the presidential election in 2016. The Wall Street Journal on Tuesday ran a scathing editorial on Trump’s leadership style.
The Paris-based OECD think tank issued a report on Wednesday saying U.S. economic growth will be slower than the group had expected because of Trump’s present troubles. The OECD expects annual U.S. GDP at 2.1% this year, which is down from its projection of 2.4% U.S. growth in March.
The key outside markets on Wednesday morning see the U.S. dollar index is higher on a corrective and short covering rebound after hitting a six-month low Tuesday. The greenback bears are still in firm near-term technical control as dollar index prices are in a three-month-old downtrend. The other “outside market” on Wednesday morning sees Nymex crude oil futures prices slightly lower. The oil market bears have the firm overall near-term technical advantage as prices are below $50.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, consumer installment credit and the weekly DOE liquid energy stocks survey.
–Jim
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are near steady in early U.S. trading. The bulls still have the strong near-term technical advantage. There are no early technical clues that a market top is close at hand. 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 neutral early today. Today, shorter-term technical resistance comes in at the contract high of 2,437.00 and then at 2,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,408.00 and then at 2,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index September futures: Prices are slightly higher in early U.S. trading and hovering near this week’s record and contract high. Bulls have the strong overall near-term technical advantage and there are no early chart clues a market top is close at hand. 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 early today. Shorter-term technical resistance is seen at the contract high of 5,900.25 and then at 5,920.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 5,856.00 and then at 5,828.00. 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 near steady in early U.S. trading and hovering near Tuesday’s contract high. Bulls have the firm 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 and 18-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 contract high of 155 12/32 and then at 156 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 154 23/32 and then at this week’s low of 154 8/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a contract high on Tuesday. 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the contract high of 126.29.0 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.19.5 and then at this week’s low of 126.12.5. 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 higher in early U.S. trading, on a corrective bounce after hitting a six-month low on Tuesday. Bears still have the firm overall near-term technical advantage. 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 bullish early today. The dollar index finds shorter-term technical resistance at 97.000 and then at 97.200. Shorter-term support is seen at this week’s low of 96.245 and then at 96.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker in early U.S. trading. The bears have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at this week’s high of $48.42 and then at $49.00. Look for sell stops just below technical support at last week’s low of $46.74 and then at $46.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were higher overnight. Corn futures have seen a bullish upside breakout from a trading range as weather in the U.S. Corn Belt will turn very hot and very dry for at least the next several days. Soybeans and wheat are still bearish. However, with little rain and hot temperatures forecast for the region, it’s likely those markets have some upside in them too.