Tuesday, June 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. U.S. stock markets are pointed toward higher openings when the New York day session begins. Equities markets were lifted in part overnight following a tweet from President Trump that said the U.S.-China Phase 1 trade deal is still very much in place. This comes following and after-hours sell off after one of Trump’s top economic advisors, China-hawk Peter Navarro, on Monday evening suggested in a TV interview that the trade deal was off. Trump’s tweet a bit later prompted the rebound.
Trader and investor sentiment is also mostly upbeat amid recent data from major world economies that shows they are rebounding from the Covid-19 pandemic shutdowns much more rapidly than most expected. Overnight the Euro zone June flash composite purchasing managers index (PMI) was reported at 46.9 versus expectations for a reading of 40.0 and compares to May’s 31.9. A reading below 50.0 suggests contraction.
However, a disturbing rise in Covid infections in some parts of the world, including some U.S. states, is being watched very closely by the marketplace and could soon dent risk appetite. If the rates of infections continue to increase, the debate will intensify regarding shutting businesses back down. Such would deal a catastrophic blow to the now-recovering economies and would likely send stock markets careening lower. The gold market is presently getting a safe-haven bid on these notions.
The important outside markets today see Nymex crude oil prices higher and trading around $41.50 a barrel. The U.S. dollar index is weaker early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. flash manufacturing and services PMIs, the Richmond Fed business survey, and new residential sales.
–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 have the firm overall near-term technical advantage. 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 below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 3,156.25 and then at the June high of 3,179.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,060.00 and then at Monday’s low of 3,027.25. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher and hit a record high in early U.S. trading as the bulls are in firm control. 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 overnight record high of 10,204.50 and then at 10,300.00. On the downside, shorter-term support is seen at 10,000.00 and then at Monday’s low of 9,843.50. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are down in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 178 1/32 and then at 178 14/32. Shorter-term support lies at 176 even and then at 175 even. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are weaker in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at Monday’s high of 138.30.5 and then at 139.03.0. Shorter-term technical support lies at 138.12.0 and then at 138.07.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker 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 even with the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 97.215 and then at Monday’s high of 97.700. Shorter-term support is seen at 96.500 and then at 96.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
August Nymex crude oil prices are higher and hit a nearly four-month high in early U.S. trading. A price uptrend on the daily chart has restarted. 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 overnight high of $41.57 and then at $42.00. Look for sell stops just below technical support at $40.00 and then at Monday’s low of $39.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are weaker in early U.S. pre-market trading. Corn and soybean bulls are fading this week and need a fresh spark. Wheat bulls are already on the ropes, seeing serious technical damage to also suggest that corn and soybeans will find it hard to sustain rallies. 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