Friday, June 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Risk appetite is dented on this last trading day of the week, as it appears China just can’t get past Covid 19. Reports said the major Chinese city of Shanghai has again imposed new Covid restrictions, after lifting some recently.
A major data point of the week, if not the month, is Friday morning’s U.S. consumer price index report for May. The CPI is expected to be up 8.2%, year-on-year, after a rise of 8.3% in April. However, many traders look for the May CPI number to be even hotter than the consensus forecast. The CPI data comes just ahead of the Federal Reserve’s FOMC monetary policy meeting next week. U.S. Treasury Secretary Janet Yellen told Congress this week that Americans should expect a prolonged period of high inflation. Many market watchers fear the U.S. economy could slip into recession, or have a bout of dreaded “stagflation”—meaning stalled economic growth with high inflation.
China reported its consumer inflation in May at up just 2.1%, year-on-year. China’s producer price index was up 6.4% in May. Meantime, China’s exports were up 16.9% in May, year-on-year, which is double market expectations. Imports were up 4.1% in May.
The key outside markets today see Nymex crude oil prices higher and trading around $122.50 a barrel. The U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.029%.
Other U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 4,100.00 and then at this week’s high of 4,170.75. Support for active traders is seen at 4,000.00 and then at 3,950.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are a bit firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 12,500.00 and then at this week’s high of 12,838.75. On the downside, shorter-term support is seen at 12,200.00 and then at 12,000.00. 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. 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 early today. Shorter-term technical resistance is seen at this week’s high of 138 15/32 and then at 139 even. Shorter-term support lies at this week’s low of 136 8/32 and then at 136 even. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly up 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 early today. Shorter-term resistance lies at this week’s high of 118.23.5 and then at 119.00.0. Shorter-term technical support lies at this week’s low of 117.22.0 and then at 117.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are lower and hit a nearly three-week low in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0704 and then at 1.0750. Shorter-term support is seen at 1.0600 and then at 1.0550. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher 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 bullish early today. Look for buy stops to reside just above technical resistance at this week’s 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 $117.14. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, on corrective pullbacks from solid gains seen earlier this week. Bulls have regained power this week to suggest a sideways, trading-range grind for the month of June. On tap today is the monthly USDA supply and demand 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