Wednesday, June 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were weaker overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins. Lingering concerns about a global trade war among the major economies are weighing on the global equities markets.
The Chinese currency, the yuan, was guided to a six-month low today by the Chinese central bank. China’s main stock gauge, the Shanghai Composite Index, fell into bear market territory this week, as it has dropped 20% from its January high. Trade war fears have also gripped Asian investors.
The key “outside markets” today find the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are higher and trading above $71.00 a barrel. The U.S. on Tuesday said it would have “zero tolerance” for Iran exporting its oil to other countries.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the advance economic indicators report, durable goods orders, pending home sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are lower in early U.S. trading. The bulls still have the overall near-term technical advantage, but are fading. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,732.50 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,700.50 and then at 2,679.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index December futures: Prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage, but are fading a bit. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 7,100.00 and then at the overnight high of 7,119.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,995.50 and then at 6,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher and hit a nearly four-week high in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 145 1/32 and then at the May high of 145 28/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 144 5/32 and then at this week’s low of 143 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher and hit a nearly four-week high in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at the overnight high of 120.11.0 and then at 120.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.30.0 and then at 119.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.525 and then at 95.000. Shorter-term support is seen at this week’s low of 93.830 and then at 93.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
August Nymex crude oil prices are higher and hit a four-week high in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above with 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 $72.00 and then at the May high of $72.70. Look for sell stops just below technical support at the overnight low of $70.56 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
Grain futures were firmer overnight on short covering and perceived bargain hunting. Bulls are trying to stabilize the market after recent strong losses. Bears are still in technical command. World ag trade worries and very good growing weather in the U.S. Corn Belt remain bearish. However, hot weather is coming for the region late this week, but traders are so far not worried about that. It’s going to take a weather market scare to jump-start rallies in the stumbling grain markets.