Wednesday, June 7–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.
In overnight news, China’s exports fell more than expected in May. Exports declined 7.5% in U.S. dollar terms from a year earlier, missing consensus for a 1.8% drop. Imports fell a less-than- expected 4.5% in May, year-on-year, after being forecast down 8.1%. Reads a Wall Street Journal headline today: “China’s trade slowdown points to global woes.” The story said China’s post-Covid economy is sputtering and global trade is “cooling rapidly” amid major central banks tightening their monetary policies.
The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are firmer and trading around $72.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.683%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, international trade in goods and services data, consumer credit and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are near steady and near Monday’s nine-month high. 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 this week’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 near steady 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 14,869.50 and then at 15,000.00. On the downside, shorter-term support is seen at 14,500.00 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 128 16/32 and then at 129 even. Shorter-term support lies at the Tuesday’s low of 127 9/32 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 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 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at this week’s high of 114.06.5 and then at 114.16.0. Shorter-term technical support is seen at this week’s low of 113.10.0 and then at the May low of 112.29.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The September Euro currency futures are slightly up in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish 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 the May low of 1.0702 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below 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 $74.00 and then at this week’s high of $75.06. Look for sell stops just below technical support at $70.00 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed to firmer overnight. Bullish for the grains is the destruction of a major dam in Ukraine this week that is likely to produce major flooding and could seriously damage crops in the region. Traders are watching this situation closely. Weather in the Corn Belt leans a bit bullish for the grain markets, as it is dry in some regions. Don’t be surprised if some degree of a weather market scare pops up in the near term. Traders are looking ahead to Friday’s USDA monthly 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