Monday, June 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. stock indexes closed at technically bullish weekly high closes last Friday. Trader and investor risk appetite is a bit more upbeat on ideas the Federal Reserve may not be so aggressive on tightening its monetary policy, for fear of setting off a recession in the U.S. economy. The recent declines in many raw commodity prices, including crude oil, are also hinting that inflationary pressures may have cooled off.
In other news, the Group of Seven industrialized nations is set to impose more economic sanctions on Russia, including banning imports of Russian gold.
Reports say Russia has defaulted on its foreign currency sovereign debt. Bloomberg reports the situation is unusual for many reasons, as Russia has the cash to pay and there is no formal declaration of default by ratings agencies as sanctions led them to withdraw their Russia ratings.
The key outside markets today see Nymex crude oil prices slightly higher and trading around $107.75 a barrel. Looking into next year, January crude oil futures are presently trading around $95.00 a barrel—further. The U.S. dollar index is lower in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.162%.
U.S. economic data due for release Monday includes durable goods orders, pending home sales and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly firmer in early U.S. trading and hit a two-week high overnight. Bulls are gaining some momentum. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,948.00 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,895.50 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer and hit a two-week high in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 12,262.00 and then at 12,500.00. On the downside, shorter-term support is seen at 12,000.00 and then at 11,800.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in firm 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 136 6/32 and then at 137 even. Shorter-term support lies at 135 even and then at 134 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bears are still in firm 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 neutral early today. Shorter-term resistance lies at the overnight high of 117.13.0 and then at last Friday’s high of 118.00.0. Shorter-term technical support lies at 116.25.5 and then at 116.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are firmer 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 bullish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0673 and then at 1.0700. Shorter-term support is seen at last week’s low of 1.0534 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are a bit higher in early U.S. trading. 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 neutral early today. Look for buy stops to reside just above technical resistance at $109.00 and then at $110.00. Look for sell stops just below technical support at the overnight low of $105.60 and then at last Friday’s low of $103.64. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures prices were mixed but mostly firmer in early U.S. pre-market trading. Grain market bulls got hammered last week. Corn, wheat and soybeans have suffered serious chart damage and prices are trending lower. A general commodity market sell off and benign weather in the U.S. Corn Belt are keeping grain futures buyers timid. Look for more subdued trading this week, ahead of Thursday’s USDA quarterly grain stocks and acreage reports.
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