Tuesday, June 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock indexes are in bear market territory, meaning they are down 20% or more from their highs. Despite today’s rebound in the U.S. indexes, traders and investors see their risk appetites as far from robust.
The data point of the week is the Federal Reserve’s FOMC meeting that begins on Tuesday morning and ends Wednesday afternoon with a statement. The Fed is expected to raise U.S. interest rates by at least 0.5%. Some reckon the Fed may raise the key Fed funds rate by 0.75%. Fed Chairman Jerome Powell will hold a press conference after the FOMC meeting concludes Wednesday afternoon.
Also monitored closely will be Tuesday’s U.S. producer price index report for May, which is seen up 0.8% from April and compares to April’s reading of up 0.5% from March.
The key outside markets today see Nymex crude oil prices higher and trading around $121.75 a barrel. The U.S. dollar index is slightly lower in early trading and not far below a 20-year high. The yield on the 10-year U.S. Treasury note is fetching 3.288%. Monday the 10-year note hit the highest level in 14 years, at 3.371%.
Crypto currencies remain under strong selling pressure again, with Bitcoin at a 1.5-year low.
Other U.S. economic data due for release Tuesday includes the NFIB small business index, the Johnson Redbook and chain store sales indexes, and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading on tepid short-covering bounces after the market hit a contract low on Monday. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,807.50 and then at this week’s high of 3,878.50. Support for active traders is seen at the the contract low of 3,735.25 and then at 3,700.00. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are firmer early U.S. trading on short covering after hitting a contract low on Monday. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below 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 the overnight high of 11,534.50 and then at this week’s high of 11,811.75. On the downside, shorter-term support is seen at the contract low of 11,285.25 and then at 11,000.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low Monday. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 134 3/32 and then at 135 even. Shorter-term support lies at the overnight low of 132 12/32 and then at the contract low of 131 19/32. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher in early U.S. trading on short covering after hitting a contract low on Monday. 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 bullish early today. Shorter-term resistance lies at the overnight high of 116.03.0 and then at this week’s high of 116.25.0. Shorter-term technical support lies at the overnight low of 115.01.5 and then at the contract low of 114.20.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are firmer and hit a four-week low in overnight 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 neutral 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 the overnight low of 1.0464 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are firmer in early U.S. trading. 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 the June high of $123.18 and then at $125.00. Look for sell stops just below technical support at $120.00 and then at this week’s low of $117.47. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were mixed in early U.S. pre-market trading. Keener risk aversion in the marketplace early this week is 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, but right now there are no strong indications of such. However, weather forecasts for the Corn Belt in the summertime can “change on a dime.”
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