Friday, June 30–Jim Wyckoff’s morning markets report
The U.S. data point of the day is the personal income and outlays report for May, including the PCE price indexes. The PCE core price index is seen coming in up 4.7%, year-on-year, which is the same as the April report reading. Federal Reserve Board members are said to watch the PCE inflation numbers closely.
China got some more downbeat economic data Friday. The world’s second-largest economy’s manufacturing sector remained in contraction. The manufacturing purchasing managers index (PMI) came in at 49.0 in June versus 48.8 May and a 49.0 consensus forecast. The services PMI in June was 53.2 versus 54.5 May and a 53.5 forecast. The composite PMI was 52.3 versus 52.9 in May. A reading above 50.0 suggests growth in the sector. Under 50.0 suggests contraction.
In other overnight news, the Eurozone consumer price index for June came in at up 5.5%, year-on-year, versus the May reading of up 6.1% and a consensus forecast of up 5.6% in June.
The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are near steady and trading around $70.00 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.878%.
U.S. economic due for release Friday includes personal income and outlays, the ISM Chicago business survey and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the solid overall 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 bullish early today. Today, shorter-term technical resistance comes in at the June high of 4,493.75 and then at 4,525.00. Support for active traders is seen at the overnight low of 4,433.00 and then at 4,400.00. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at the June high of 15,475.50 and then at 15,600.00. On the downside, shorter-term support is seen at 15,000.00 and then at this week’s low of 14,853.50. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower and hit a four-week low 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- and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 126 13/32 and then at 127 even. Shorter-term support lies at the May low of 125 9/32 and then at 125 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower and hit a 3.5-month low 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 bearish early today. Shorter-term resistance lies at the overnight high of 112.08.5 and then at 112.16.0. Shorter-term technical support is seen at the overnight low of 111.25.5 and then at 111.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0917 and then at Thursday’s high of 1.0984. Shorter-term support is seen at 1.0850 and then at 1.0800. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
August Nymex crude oil prices are near steady in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $70.73 and then at $72.00. Look for sell stops just below technical support at $68.00 and then at the June low of $66.96. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were higher overnight on corrective bounces from recent strong selling pressure. Weather forecasts for the U.S. Midwest have turned wetter and that’s bearish. The bulls need the dryness pattern to ratchet up a notch, to include more heat, in order to revive grain prices. Corn, wheat and soybean market bulls have lost their near-term technical advantage. 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. On tap today are two of the biggest USDA reports of the year: the planted acreage and quarterly grain stocks reports. Look for higher price volatility in the immediate aftermath of the 12:00 noon EDT USDA 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