Tuesday, June 15–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins and at record highs in the S&P 500 and Nasdaq stock index futures. The past several weeks have seen little risk aversion in the marketplace and that’s been bullish for the global stock markets.
Traders will be eyeing today’s U.S. retail sales report for May, expected to come in at down 0.6% from April. The May producer price index is another important data point out on a very busy report day today, and is expected to come in at up 0.5% from April.
The Federal Reserve’s FOMC meeting begins Tuesday morning and ends Wednesday afternoon with a statement. While no major changes are expected for U.S. monetary policy, focus will be on the Fed’s tenor on inflation prospects and when the central bank will start to taper its very easy money policies. Fed officials recently have hinted they will begin discussing a timetable for reducing its bond-buying program (quantitative easing) sooner rather than later.
The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are up and trading around $71.50 a barrel after hitting a 2.5-year high of $71.78 Monday. The key U.S. Treasury 10-year note yield is fetching 1.485%.
U.S. economic data due for release Tuesday includes the weekly chain store sales index and the Johnson Redbook retail sales report, the Empire State manufacturing survey, retail sales, the producer price index, industrial production and capacity utilization, manufacturing and trade inventories, the NAHB housing market index, and Treasury international capital data.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit another record and contract high overnight. Bulls have the solid overall 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight contract high of 4,258.25 and then at 4,275.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,224.50 and then at last week’s low of 4,197.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.5
September Nasdaq index futures: Prices are higher and hit a record high in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight record high of 14,155.25 and then at 14,250.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 14,000.00 and then at 13,900.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are slightly firmer in early U.S. trading. A price uptrend is in place on the daily chart and have the 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 neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 159 14/32 and then at last week’s high of 159 29/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 158 16/32 and then at 158 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up in early U.S. trading. A price uptrend is in place on the daily chart. 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 neutral to bearish early today. Shorter-term resistance lies at Monday’s high of 132.29.5 and then at last week’s high of 133.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.12.0 and then at 132.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are near steady 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 and 18-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 the overnight high of 1.2169 and then at 1.2200. Buy stops likely reside just above those levels. Shorter-term support is seen at last week’s low of 1.2114 and then at 1.2081. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are firmer in early U.S. trading and not far below Monday’s 2.5-year high. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $71.78 and then at $72.50. Look for sell stops just below technical support at Monday’s low of $70.65 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are mixed to weaker in early U.S. pre-market trading. Bulls are fading fast and need to step up this week. The extended weather forecasts are still not calling for a whole lot of rain in the U.S. Midwest. However, next week’s weather is expected to be cooler with some better chances for rain. It’s still early in the growing season and don’t be surprised to see more fireworks in the grain futures in the coming weeks.
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