Thursday, June 27–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
There are new developments in the U.S.-China trade war. Just ahead of the late-week meeting between U.S. President Trump and Chinese President Xi in Japan at the G20 confab, Xi has reportedly told Trump he’s ready to settle the trade war, but has laid out several conditions that Trump may not accept, including lifting sanctions on China telecommunications giant Huawei. So far today markets have not reacted much to this news, as traders are not sure if this is a positive or a negative for reaching a final deal. The outcome of the U.S.-China summit meeting is still very uncertain and could have major implications for many markets.
In other news, Bitcoin is posting strong losses of around $2,000 today after hitting a 17-month high Wednesday.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $58.75 a barrel. Meantime, the U.S. dollar index is slightly up on a corrective bounce and some chart consolidation after hitting a three-month low Tuesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the third estimate of first-quarter GDP, pending home sales and the Kansas City Fed manufacturing 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. However, if prices see stronger selling pressure the rest of this week then a big and bearish double-top reversal pattern on the daily bar chart could be developing. 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 Wednesday’s high of 2,939.00 and then at 2,958.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,914.75 and then at 2,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are 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 even with 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 overnight high of 7,716.50 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: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are modestly up in early U.S. trading, on profit taking. 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 155 16/32 and then at 156 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 154 17/32 and then at 154 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up 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 127.12.0 and then at 127.08.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 127.27.0 and then at 128.00.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly up on a correction after hitting a three-month low Tuesday. 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. The dollar index finds shorter-term technical resistance at the overnight high of 95.920 and then at 96.000. Shorter-term support is seen at this week’s low of 95.365 and then at 95.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
August Nymex crude oil prices are lower on profit taking after hitting a four-week high Wednesday. 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 to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $59.28 and then at this week’s high of $59.93. Look for sell stops just below technical support at $58.00 and then at $57.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures prices were mixed overnight. Corn is down around 3/4 cent, soybeans off around 1 cent and wheat 6 to 7 cents higher. The grain markets are likely to be squelched Thursday, just ahead of the release Friday morning of updated U.S. acreage and quarterly grain stocks reports from the Agriculture Department. 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. Friday’s acreage report will be one of the most important grain market reports of the year, due to the uncertainty surrounding it. Traders will closely examine weekly USDA export sales data out Thursday morning. Recently, worldwide demand for U.S. grains has been less than stellar. U.S. Corn Belt weather has turned a bit bearish for corn and soybeans now. Some drier conditions later this week will benefit the crops. Also late this week, probably after the markets close on Friday, the U.S. and Chinese presidents meet to discuss trade. Despite new 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.
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