Thursday, June 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European shares mostly down and Asian shares mostly up. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. It appears the marketplace has made a pivot from focusing more on inflation to now focusing more on U.S. economic recession. Many commodity markets are selling off, led by crude oil, on concerns of lower demand in the coming months. Federal Reserve Chairman Powell’s comments to a Senate panel on Wednesday did little to alleviate worries the U.S. economy will slip into recession in the coming months. Powell said it will be challenging for the Fed to engineer a soft landing for the U.S. economy, amid the central bank’s aggressive tightening of its monetary policy. Powell speaks to a U.S. House panel Thursday.
In overnight news, the Euro zone’s June manufacturing purchasing managers’ index (PMI) came in at 52.0 versus 54.6 in May. The June PMI was forecast at 53.8.
The key outside markets today see Nymex crude oil prices weaker and trading around $105.75 a barrel. The U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.141%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash manufacturing and services purchasing managers indexes, the Kansas City Fed manufacturing survey, and the DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading but not far above the recent contract low. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,805.50 and then at 3,843.00. Support for active traders is seen at the overnight low of 3,735.00 and then at Wednesday’s low of 3,693.25. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are firmer in early U.S. trading and not far above last week’s contract low. 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 below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 11,745.75 and then at 12,000.00. On the downside, shorter-term support is seen at the overnight low of 11,460.50 and then at this week’s low of 11,273.75. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher and hit a two-week high in early U.S. trading, on more short covering. Bears are still in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 137 4/32 and then at 138 even. Shorter-term support lies at the overnight low of 135 24/32 and then at 135 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher in early U.S. trading, on more short covering. Bears are still in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 117.16.0 and then at 117.24.0. Shorter-term technical support lies at the overnight low of 116.25.5 and then at 116.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0673 and then at 1.0700. Shorter-term support is seen at this week’s low of 1.0534 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading. Bulls have faded recently. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $107.00 and then at $108.00. Look for sell stops just below technical support at $104.00 and then at this week’s low of $101.53. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures prices were solidly lower in early U.S. pre-market trading. Grain market bulls have faded badly recently, with wheat suffering serious chart damage and corn also seeing near-term technical damage. U.S. and global economic recession fears are hitting commodity markets hard, led by crude oil. Also, weather in the U.S. Corn Belt is so far non-threatening this growing season. Bears have momentum on their side.
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