Monday, June 10–Jim Wyckoff’s Morning Markets Report
European and Asian stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. indexes have posted strong gains the past week and have bullish technical momentum on their side, to now suggest a test of the contract/record highs.
Trader and investor attitudes are more upbeat to start the trading week after the U.S. and Mexico late Friday reached a deal on immigration that avoided the U.S. slapping trade tariffs on its southern neighbor. However, progress on the U.S.-China trade war front remains elusive amid no signs the world’s two largest economies are coming closer to any agreement on trade matters. Discussions are ongoing, however.
In overnight news, China’s import and export data for May was downbeat. China’s imports in May were down 8.5%, year-on-year, after being up 4.0% in April. The China-U.S. trade war is mostly to blame for slowing imports. China’s exports were up 1.1% in May, year-on-year, after being down 2.7% in April.
The key “outside markets” today see Nymex crude oil prices firmer and trading just above $54.00 a barrel. The U.S. dollar index is solidly higher today on a corrective rebound from last week’s downside pressure.
U.S. economic data due for release Monday is light and includes the employment trends index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer and hit a four-week high in early U.S. trading. Bulls have upside momentum to suggest more gains and a challenge of the recent highs. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,903.00 and then at 2,925.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,875.00 and then at 2,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher and hit a three-week high in early U.S. trading. A five-week-old downtrend on the daily chart has been negated. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,509.00 and then at 7,550.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,450.00 and then at 7,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are solidly lower in early U.S. trading, on profit taking from recent gains. Bulls still have the solid overall near-term technical advantage. 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 bearish early today. Shorter-term technical resistance is seen at 154 even and then at the overnight high of 154 6/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 153 3/32 and then at 152 16/32. 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, on profit taking. Bulls still have the solid overall near-term technical advantage. 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 bearish early today. Shorter-term support lies at last week’s low of 126.22.0 and then at 126.16.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 127.00.0 and then at 127.08.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is firmly up in early U.S. trading, on a rebound from last week’s pressure. Bulls still have the overall near-term technical advantage but have faded badly recently to suggest the USDX has put in a market top. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Friday’s high of 96.595 and then at 97.000. Shorter-term support is seen at the overnight low of 96.050 and then at last week’s low of 95.890. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
July Nymex crude oil prices are near steady in early U.S. trading. Bears are still in near-term technical control. A price downtrend is still in place on the daily chart. 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 $55.00 and then at $56.00. Look for sell stops just below technical support at $53.00 and then at $52.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures prices were lower overnight, with corn down around 3 1/2 cents, soybeans off 5 to 7 cents and wheat down around 5 to 6 cents. U.S. Corn Belt weather turned drier over the weekend, which likely allowed for strong planting progress for the corn and soybeans. However, even as the weather has turned drier in recent days, the heretofore record or near-record slow planting pace for U.S. corn and soybeans is likely to reduce production totals this fall. Traders are anxiously awaiting Monday afternoon’s latest crop progress reports, followed by Tuesday’s monthly USDA supply and demand report that will update U.S. and world grain balance sheets. In the crop progress reports, corn planting is expected at 80 to 85% complete versus 67% last week and 100% last year. Soybean planting is seen at just under 60% planted versus 39% last week and 93% last year at this time. Hard red spring wheat planting is expected a 96% to 97% done versus 93% last week and 100% last year. This afternoon’s report will also show the first corn condition rating of the year. Selling interest in the grains is somewhat limited following the late-Friday agreement between the U.S. and Mexico on immigration that avoids the U.S. imposing trade sanctions on Mexico. Traders will also closely examine Monday morning’s weekly USDA export inspections report.
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