Tuesday, June 20–Jim Wyckoff’s morning markets report
In overnight news, China again slightly eased its monetary policy by lowering two key lending rates by 10 basis points. The rate reductions were deemed by China watchers as less than expected.
U.S. Secretary of State Anthony Blinken met on Monday with Chinese President Xi Jinping and said they agreed to “stabilize” badly deteriorated U.S.-China ties, but the U.S.’s top diplomat left Beijing without an agreement on better military communications between the U.S. and China forces. The meeting was the highest-level U.S. visit to China in five years.
Fed Chair Jerome Powell will provide his semi-annual monetary policy report to Congress on Wednesday and Thursday. Powell is widely expected to repeat comments from his post-Fed meeting press conference, which had a hint of caution but still opened the door to higher rates down the road. The marketplace will be closely watching the testimony for any fresh clues on the timing of the rate increases. Should Powell strike a hawkish note, this could boost the U.S. dollar and U.S. Treasury yields. But if he is more downbeat and fails to provide fresh clues, this may weaken the greenback and lower yields. Speeches from Federal Reserve Bank of St. Louis President James Bullard and New York President John Williams today will be closely monitored.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are slightly up and trading around $72.00 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 3.779%.
U.S. economic due for release Tuesday includes new residential construction.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading and not far below last week’s 10-month high. Bulls have the solid 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. 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 overnight high of 4,462.00 and then at last week’s high of 4,485.50. Support for active traders is seen at 4,400.00 and then at 4,375.00. Wyckoff’s Intra-day Market Rating: 4.0
September Nasdaq index futures: Prices are slightly lower in early U.S. trading and not far below last week’s 10-month high. Bulls have the solid 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. 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 15,322.50 and then at last week’s high of 15,475.50. On the downside, shorter-term support is seen at 15,100.00 and then at 15,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are weaker in early U.S. trading. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 127 20/32 and then at 128 even. Shorter-term support lies at 127 even and then at last week’s low of 126 4/32. Wyckoff’s Intra-Day Market Rating: 4.5
September U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 113.07.5 and then at 113.18.0. Shorter-term technical support is seen at the overnight low of 112.23.0 and then at the June low of 112.12.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The September Euro currency futures are slightly lower in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0997 and then at 1.1050. Shorter-term support is seen at 1.0950 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are slightly higher in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $73.50 and then at the June high of $75.06. Look for sell stops just below technical support at the overnight low of $70.63 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed to lower overnight. Parts of the U.S. Corn Belt received good rains over the weekend. But extended weather forecasts for the U.S. Midwest are for mostly dry conditions. Corn and soybean market bulls have the near-term technical advantage. Wheat markets are still overall bearish but will be pulled higher if corn and soybeans resume their rallies. Late June and early July is a critical timeframe for the grain markets. At that time the existing price trends in the grains can be accelerated or reversed.
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