Friday, June 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Recent, surprisingly upbeat economic data from the U.S. and other countries continue to stoke trader and investor confidence and risk appetite. And there are perceptions that central banks are at the ready with even more monetary stimulus should the need arise.
Friday is quadruple-witching day in the U.S. stock market, whereby stocks, stock options, options on futures and stock index futures contracts expire. History shows these days can produce higher volatility in the stock market.
Lingering in the background of the marketplace at present is the inflammatory rhetoric coming out of North Korea, including that rogue nation blowing up a building near its border with South Korea. Don’t be surprised if this becomes a front-burner marketplace matter in the coming weeks or few months.
Nymex crude oil prices pushed above $40 Friday morning, providing another clue that this important outside market has recovered from its April meltdown and that world economies will recover faster than expected. The other key outside markets early today see the U.S. dollar index near steady. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.73% level.
U.S. economic data due for release Friday is light and includes international transactions and the current account. Several Federal Reserve officials are slated to give speeches today.
–Jim
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U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls this week have recovered well from last week’s sell off and working to restart a price uptrend. The 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 is above 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 3,156.25 and then at 3,177.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,094.75 and then at Thursday’s low of 3,064.50. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher in early U.S. trading as the bulls are also recovering well from late last week’s price pressure and are very close to the recent record high. 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 bullish early today. Shorter-term technical resistance is seen at the record high of 10,140.00 and then at 10,250.00. On the downside, shorter-term support is seen at the overnight low of 9,979.75 and then at 9,800.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 177 7/32 and then at 178 even. Shorter-term support lies at Thursday’s low of 175 30/32 and then at this week’s low of 174 29/32. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are down in early U.S. trading. Bulls still have the solid 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 resistance lies at Thursday’s high of 138.28.0 and then at 139.00.0. Shorter-term technical support lies at Thursday’s low of 138.16.0 and then at this week’s low of 138.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly up in early U.S. trading. 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 bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 97.550 and then at 98.000. Shorter-term support is seen at 97.000 and then at 96.765. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are higher in early U.S. trading. A price uptrend on the daily chart appears to be restarting. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 the June high of $40.44 and then at $45.00. Look for sell stops just below technical support at the overnight low of $38.76 and then at $38.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are firmer in early U.S. pre-market trading, on short covering. Bulls have stabilized the corn and soybean markets this week but wheat prices have seen serious technical erosion—so much so that corn and soybeans will find it hard to sustain rallies, too. Grain market bulls need a weather market to develop in the U.S. Corn Belt and the clock is ticking as the most critical part of the growing season approaches for corn—early July.
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