Thursday, June 16–Jim Wyckoff’s Morning Markets Report
The Bank of England has just raised its key interest rate by 0.25%. The move was not unexpected.
Another worrisome element in the financial markets is the plunging value of the Japanese yen against the U.S. dollar. The yen has lost around one-third of its value against the dollar the past 1.5 years as the Bank of Japan keeps its monetary policy easy, while other major central banks tighten. A Barrons headline today reads: “The yen’s weakness is another sign that something isn’t right in the global economy.”
The key outside markets today see Nymex crude oil prices lower and trading around $114.25 a barrel. The U.S. dollar index is a bit lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.37%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey and new residential construction.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are solidly lower and hit a contract low in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at of 3,800.00 and then at this week’s high of 3,878.50. Support for active traders is seen at the overnight contract low of 3,695.00 and then at 3,650.00. Wyckoff’s Intra-day Market Rating: 3.0
September Nasdaq index futures: Prices are solidly lower early U.S. trading and near the contract hit on Tuesday. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 11,500.00 and then at this week’s high of 11,811.75. On the downside, shorter-term support is seen at the contract low of 11,236.00 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are lower and near this week’s contract low in early U.S. trading, on short covering after hitting a contract low Tuesday. Bears are still in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 133 23/32 and then at 134 even. Shorter-term support lies at the contract low of 131 3/32 and then at 130 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
September U.S. T-Notes: Prices are lower in early U.S. trading. Bears are in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 116.00.0 and then at this week’s high of 116.25.0. Shorter-term technical support lies at the contract low of 114.07.5 and then at 114.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0582 and then at 1.0600. Shorter-term support is seen at this week’s low of 1.0428 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are weaker and hit a two-week low in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $116.96 and then at Wednesday’s high of $119.61. Look for sell stops just below technical support at $113.00 and then at $112.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were firmer in early U.S. pre-market trading. Keener risk aversion in the marketplace this week is still a bearish element for the grain markets. Bulls have the overall near-term technical advantage to suggest a sideways, trading-range grind for the month of June. Grain market bulls are hoping for a weather market in the coming weeks. The Corn Belt is expected to get hot next week. On tap today is the weekly USDA export sales 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