Friday, June 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight, with Asian indexes mixed and European indexes mostly higher. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
In overnight news, worries regarding the financial and political stability of Italy were somewhat assuaged when the two major antiestablishment parties made a deal on a coalition government. This is apparently the better alternative than new elections, according to the sense of the marketplace at present.
The U.S. on Thursday implementing previously announced tariffs on imports of aluminum and steel does have traders and investors worried about a global trade war. Retaliatory tariffs against U.S. products are already being announced from other countries.
Traders are awaiting Friday morning’s U.S. jobs report for May. The key non-farm payrolls number is expected to come in at up around 190,000. Wednesday’s ADP jobs report showed a rise of 178,000. Look for the potential for more active trading in the aftermath of the jobs report—especially if it’s a significant miss from the forecast.
The key “outside markets” today find Nymex crude oil prices weaker and trading just below $67.00 a barrel.
Meantime, the U.S. dollar index is lower again today on more profit taking and a corrective pullback after hitting hit a 10.5-month high on Tuesday.
Other U.S. economic data due for release Friday includes the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, the global manufacturing PMI, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading. The bulls and bears are on a level overall near-term technical playing field. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Thursday’s high of 2,723.50 and then at the May high of 2,646.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,711.25 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are firmer in early U.S. trading. 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 Thursday’s high of 7,049.50 and then at 7,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,000.00 and then at 6,983.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are solidly lower in early U.S. trading. Bulls have faded fast after seeing solid gains scored Tuesday. Shorter-term moving averages (4- 9- 18-day) are still 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 144 19/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at 143 22/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are solidly lower in early U.S. trading. Bulls are fading again. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term resistance lies at the overnight high of 120.08.0 and then at 120.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.29.0 and then at 119.20.0. 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 weaker on more of a corrective pullback after hitting a 10.5-month high on Tuesday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.725 and then at 94.000. Shorter-term support is seen at this week’s low of 93.250 and then at 93.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker in early U.S. trading. A bearish pennant pattern has formed on the daily bar chart. The shorter-term moving averages are bearish early today as the 4-day is below the 9- and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish today. Look for buy stops to reside just above technical resistance at the overnight high of $67.34 and then at $68.00. Look for sell stops just below technical support at $66.00 and then this week’s low of at $65.80. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were mixed overnight. Traders will closely examine this morning’s weekly USDA export sales report. Generally good growing weather in the U.S. Corn Belt at present is bearish for the grains. Worries about a U.S.-led global trade war are also limiting buying interest in the grain at present.