Friday, June 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins and at or near record highs. The global marketplace remains calm at present, amid no major geopolitical flareups in play and some typical summertime-doldrums trading occurring. That leaves the discussion in the marketplace on inflation prospects.
The key U.S. Treasury 10-year note yield is fetching 1.44% and is at a more-than-three-month low. This comes despite the U.S. consumer price index on Thursday showing the biggest surge in inflation in 13 years—up 5.0% in May, year-on-year. Low U.S. Treasury yields are a major argument that inflation is not on course to become problematic. Other indicators do suggest otherwise and thus the debate continues on the matter.
In other overnight news, reports say China will tap state reserves to control surging commodity prices. China will offer copper, aluminum, zinc and other commodities directly to end-users in order to curb the rally in commodity prices, according to a Bloomberg report. China is also planning on expanding pork inventories and accelerating the construction of coal infrastructure in order to have greater control over both markets.
The marketplace will monitor the weekend meeting of the Group of Seven countries in the U.K. A draft of the meeting communique shows the group will focus on the pandemic and the G-7 collective relations with China and Russia.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are slightly up and trading around $70.50 a barrel after hitting a 2.5-year high of $70.65 on Thursday.
U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and very close to the record high set Thursday. 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,239.50 and then at 4,265.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,197.25 and then at 4,180.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are higher and hit a six-week 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 record high of 14,050.00 and then at 14,150.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,850.00 and then at this week’s low of 13,716.25. Sell stops likely reside 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 firmer and hit a more-than-three-month high overnight. Bulls have started a price uptrend on the daily chart and have 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 early today. Shorter-term technical resistance is seen at the overnight high of 159 29/32 and then at 160 even. Buy stops likely reside just above those levels. Shorter-term support lies at 159 even and then at 158 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher and hit a more-than-three-month high overnight. Bulls have momentum amid a price uptrend 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 early today. Shorter-term resistance lies at the overnight high of 133.06.5 and then at 133.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.26.0 and then at 132.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The September Euro currency futures are lower 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2215 and then at this week’s high of 1.2241. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.2156 and then at the June low of 1.2127. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are firmer in early U.S. trading and hit a 2.5-year high overnight. 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 the overnight high of $70.80 and then at $71.00. Look for sell stops just below technical support at the overnight low of $69.68 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading. Trading remains choppy and volatile in a serious weather market in the grains. The extended weather forecasts for through at least late-June are calling for warmer and mostly drier weather conditions in much of the U.S. midsection. Expect more high daily volatility in the grain futures markets in the near term. Bulls still have the overall near-term technical advantage but wheat is the laggard at present.
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