Monday, June 17–Jim Wyckoff’s Morning Markets Report
European stock indexes were mostly firmer overnight, while Asian shares were mixed. The U.S. stock indexes are also pointed toward slightly higher openings when the New York day session begins.
Markets are quieter early this week as traders and investors worldwide are awaiting the Federal Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. FOMC members will discuss U.S. monetary policy. Most believe the Fed will not raise interest rates at this meeting, but members may lean toward a more dovish stance on monetary policy, to set the table for a rate hike in the coming few months.
There were no major news developments on the geopolitical front over the weekend, including no escalation of the U.S.-Iran tensions following last week’s attacks on big ships in the Gulf of Oman that the U.S. blamed on Iran. Still, this matter is not likely to just fade away.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $52.00 a barrel. Meantime, the U.S. dollar index is slightly down in early U.S. trading.
U.S. economic data due for release Monday includes the Empire State manufacturing survey and the NAHB housing market index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls still have the firm overall near-term technical advantage. 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 June high of 2,915.75 and then at 2,930.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,871.50 and then at 2,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls still have the firm overall near-term technical advantage. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 7,562.50 and then at last week’s high of 7,626.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at last week’s low of 7,446.25 and then at 7,400.00. 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 weaker 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 154 19/32 and then at the contract high of 155 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at 153 20/32 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 lower in early U.S. trading, on a corrective pullback after hitting a contract high on Friday. 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 bearish early today. Shorter-term support lies at 127.00.0 and then at 126.24.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 127.12.5 and then at the contact high of 127.21.0. 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 slightly down in early U.S. trading following solid gains Friday. Bulls have the 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 97.095 and then at 97.300. Shorter-term support is seen at 96.750 and then at 96.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker in early U.S. trading. Bears still have the overall near-term technical advantage. A price downtrend is still in place on the daily chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $52.74 and then at $53.45. Look for sell stops just below technical support at $51.00 and then at the June low of $50.60. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were solidly higher overnight, with corn up around 9 cents and at a five-year high in nearby futures, soybeans up around 16 cents and at a two-month high, with wheat up around 9 cents. The major weather market in the grains continues to play out. Weekend rains occurred over much of the U.S. Midwest, with more precipitation in the forecast over the next week, which will prevent farmers from seeding the remainder of the corn and soybean fields that are yet unplanted. All eyes will be on the Monday afternoon USDA crop progress reports. Traders are looking for corn planting at 95% to 96% done versus 83% last week and 100% last year. U.S. soybean planting is expected at 80% done compared to 60% last week and 96% last year at this time. Cash corn and soybean basis levels have also narrowed (firmed up) to suggest commercial end-users are getting concerned about securing future supplies. On the back burner of the grain markets at present is the U.S.-China trade war that so far shows no signs of an end. President Trump last week said Chinese President Xi Jinping needs to meet with him in late June to get a deal done, or the U.S. could slap more tariffs on Chinese goods.
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