Tuesday, June 6–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. U.S. equities bulls remain resilient as the major stock indexes trade at or near their highs for the year.
In overnight news, reports said China financial authorities are asking nation’s largest lenders to lower their deposit rates in order to boost economic growth. State-owned banks, including the Bank of China, Industrial and Commercial Bank of China and Bank of Communications were last week advised to cut rates on their deposits by 5 basis points on demand deposits and 10 basis points on three- and five-year deposits.
Australia’s central bank Tuesday raised its main interest rate by 0.25%, to 4.10%. The bank said more rate hikes may be needed to contain inflation.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are lower and are trading around $70.75 a barrel. The marketplace is taking note of oil’s inability to rally in the aftermath of Saudi Arabia’s surprise move pledging to unilaterally cut its oil production by 1 million barrels per day starting in July. Nymex crude prices are presently lower than they were just prior to the weekend Saudi news. A Wall Street Journal story headline today reads: “Commodity prices signal slump.” Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.662%.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook retail sales report and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly lower after hitting a nine-month high on Monday. 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 Monday’s high of 4,348.75 and then at 4,375.00. Support for active traders is seen at 4,300.00 and then at last Friday’s low of 4,269.50. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index futures: Prices are slightly weaker in early U.S. trading after hitting a nine-month high Monday. 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 Monday’s high of 14,869.50 and then at 15,000.00. On the downside, shorter-term support is seen at Monday’s low of 14,684.50 and then at last week’s low of 14,420.00. Wyckoff’s Intra-Day Market Rating: 5.0.
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 even with the 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 129 even and then at last week’s high of 129 16/32. Shorter-term support lies at the overnight low of 127 19/32 and then at this week’s low of 126 25/32. 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 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 bullish early today. Shorter-term resistance lies at 114.12.0 and then at 114.20.0. Shorter-term technical support is seen at the overnight low of 113.24.0 and then at this week’s low of 113.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are weaker in early U.S. trading. 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0842 and then at 1.0900. Shorter-term support is seen at last week’s low of 1.0702 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are lower 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $72.03 and then at $73.00. Look for sell stops just below technical support at $70.00 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices solidly higher overnight. Bullish for the grains is the destruction of a major dam in Ukraine that is likely to produce major flooding and could seriously damage crops in the region. Traders will watch this situation closely. Weather in the Corn Belt is still 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