Friday, June 2–Jim Wyckoff’s morning markets report
Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The general marketplace has breathed a sigh of relief after the U.S. Senate passed the government debt-ceiling-extensions bill, following House passage earlier this week. The bill will now be signed by President Biden.
Traders are now focusing on the Labor Department’s employment situation report for May on Friday morning. The key non-farm payrolls number is seen coming in at up 190,000 compared to the April non-farm jobs number of up 253,000. A big miss on the consensus NFP forecast would likely cause higher markets volatility in the immediate aftermath of the jobs report.
Traders and investors are still buzzing about the Wall Street Journal report Thursday that said the Fed is likely to pause in its interest-rate-hiking cycle at the June FOMC meeting, before raising rates again later this summer. That’s a shift from the consensus marketplace belief just recently that the Fed would again raise rates at the June FOMC meeting. However, a “sizzling jobs report” on Friday would likely throw cold water on the Fed pause, said the WSJ report. Reads a Barrons headline this morning: “A Fed pause now looks likely, but don’t mistake it for a pivot.”
The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil prices are higher and are trading around $71.00 a barrel. The OPEC-plus oil cartel meets this weekend. While there seems to be a widely held view the group won’t announce any further production cuts, it’s worth noting that the same was true at the last meeting and then the group announced cuts of roughly another million barrels, notes analyst Craig Erlam of OANDA. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.616%.
There is no other U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer and hit a nine-month high in early U.S. trading. 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 4,300.00 and then at 4,350.00. Support for active traders is seen at this week’s low of 4,216.00 and then at 4,187.50. Wyckoff’s Intra-day Market Rating: 6.5
September Nasdaq index futures: Prices are higher in early U.S. trading and near this week’s nine-month high. 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 and 18-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 this week’s high of 14,737.00 and then at 14,900.00. On the downside, shorter-term support is seen at this week’s low of 14,420.00 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 129 16/32 and then at 130 even. Shorter-term support lies at Wednesday’s low of 128 even and then at 127 14/32. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 this week’s high of 115.00.0 and then at 115.10.0. Shorter-term technical support is seen at 114.10.0 and then at 114.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are slightly higher on short covering after hitting a 2.5-month low Wednesday. The shorter-term moving averages for the Euro 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 for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at 1.0850 and then at 1.0900. Shorter-term support is seen at 1.0750 and then at this week’s low of 1.0702. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $72.00 and then at $73.00. Look for sell stops just below technical support at today’s low of $70.00 and then at $68.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed to weaker overnight. The near-term technical postures for soybeans, meal, bean oil, wheat and corn futures are still all overall bearish. Weather in the Corn Belt is mostly benign for the grain markets, but it is dry in some regions. Don’t be surprised if some degree of a weather market scare pops up in the near term.
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