Tuesday, June 13–Jim Wyckoff’s morning markets report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The marketplace is awaiting the U.S. consumer price index report for May, out this morning. The CPI is forecast up 4.0%, year-on-year, while Wednesday morning’s U.S. producer price index report for May is seen down 0.1%, month-on-month.
In overnight news, China’s central bank eased its monetary policy by trimming a key lending rate. The central bank cut its seven-day reverse repurchase operations to 1.9% from 2.0%. This latest move is a further attempt by the Chinese government to boost Chinese economic growth, which is slowing.
The U.S. data point of the week is the FOMC meeting of the Federal Reserve, which begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. A majority of the marketplace still thinks the Fed will pause in its interest-rate-tightening cycle. However, a stronger U.S. jobs report last Friday has bolstered those outliers who are thinking the Fed will make another rate hike this week.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are higher and trading around $68.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.734%.
Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sale report, the NFIB small business index and real earnings. U.S. Treasury Secretary Janet Yellen speaks to a House of Representatives committee today on the health of the international financial system.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading and hit a 10-month high. Bulls have the solid 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 neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,402.50 and then at 4,425.00. Support for active traders is seen at Monday’s low of 4,348.75 and then at last week’s low of 4,305.75. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are slightly up in early U.S. trading and hit a 10-month high overnight. 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 15,083.50 and then at 15,200.00. On the downside, shorter-term support is seen at Monday’s low of 14,732.00 and then at 14,600.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are firmer 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-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 128 3/32 and then at 128 16/32. Shorter-term support lies at Monday’s low of 126 21/32 and then at 126 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher 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 neutral early today. Shorter-term resistance lies at 113.23.0 and then at 114.00.0. Shorter-term technical support is seen at Monday’s low of 113.03.0 and then at the May low of 112.29.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are higher and hit a two-week high in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0868 and then at 1.0900. Shorter-term support is seen at Monday’s low of 1.0792 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
July Nymex crude oil prices are higher in early U.S. trading on a corrective bounce from recent losses. 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 Monday’s high of $70.33 and then at last Friday’s high of $71.77. Look for sell stops just below technical support at Monday’s low of $67.80 and then at the June low of $67.03. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed to firmer overnight. Corn market bulls have the near-term technical advantage. Wheat markets are still bearish. Soybeans are neutral overall, but the bulls have gained some momentum recently. Weather in the Corn Belt leans slightly bullish for the grain markets, as it is dry in some regions. Don’t be surprised if some degree of a weather market scare pops up in the near term. Late June and early July is a critical timeframe for the grain markets.
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