Friday, June 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Traders await what is arguably the most important U.S. economic report of the month, Friday morning’s Employment Situation Report for May from the Labor Department. The key non-farm payrolls number is forecast to come in up around 675,000 after a paltry rise of 266,000 in April. The unemployment rate for May is seen at 5.9% versus 6.1% in April. Look for more active trading in the aftermath of the jobs report, especially if it’s a big miss from market expectations.
In overnight news, the Eurozone reported its April retail sales were down 3.1% from March but up 23.9%, year-on-year.
In other news, reports said Russia plans to abandon the U.S. dollar as part of its sovereign wealth fund. Russia currently has 35% of the fund in greenbacks but will cut that to zero. Many veteran market watchers reckon that Russia and China will continue to scheme to erode the dollar’s global dominance. While Russia’s economy is not that significant on the world stage, China boasts the world’s second-largest economy that will move to the number-one spot likely within a decade. Both Russia and China correctly claim the U.S. uses the might of the dollar for political purposes, such as sanctions.
The key outside markets today see the U.S. dollar index slightly higher and hitting a three-week high overnight as the greenback bulls have had a good week. Nymex crude oil prices are a bit higher and trading around $69.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.625%.
Other U.S. economic data due for release Friday includes manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are just a bit lower in early U.S. trading and not far from the recent record high. Bulls have the solid 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 above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at Thursday’s high of 4,203.00 and then at the contract high of 4,228.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,155.50 and then at 4,125.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Thursday’s high of 13,695.00 and then at this week’s high of 13,761.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 13,457.50 and then at 13,350.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly up in early U.S. trading today. Bears have the overall near-term technical advantage. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 156 23/32 and then at 157 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 155 16/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
September U.S. T-Notes: 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 below 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 resistance lies at 131.28.0 and then at 132.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131.18.0 and then at 131.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The September Euro currency futures are weaker and hit a three-week low in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2155 and then at 1.2200. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2100 and then at last week’s low of 1.2081. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 this week’s high of $69.40 and then at $70.00. Look for sell stops just below technical support at $68.00 and then at $67.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are solidly higher in early U.S. pre-market trading. Trading has turned choppy and volatile. Grain market bulls have made a strong recovery from recent selling pressure, amid a fresh weather market scare, to suggest the markets put in near-term bottoms last week. The extended weather forecasts for through at least mid-June are calling for warmer and drier weather conditions in much of the U.S. midsection. Weekly USDA export sales data is out today, delayed this week due to the holiday Monday.
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