Thursday, June 13–Jim Wyckoff’s Morning Markets Report
European and Asian stock indexes were mostly firmer overnight. The U.S. stock indexes are also pointed toward modestly higher openings when the New York day session begins. Notions of more accommodative monetary policies from the world’s major central banks, amid generally very low inflationary pressures globally, are supporting world stock markets recently.
The marketplace is a bit uneasy Thursday after reports more ships in the Persian Gulf area (this time in the Gulf of Oman) being attacked by smaller gunboats. U.S. Navy ships are reportedly now protecting some oil tankers in the region. Oil prices are solidly higher today on the news, while gold prices are also getting a modest safe-haven bid. Right now tensions in markets are not real high, but this situation could deteriorate quickly if Iran and the U.S. have a direct military confrontation.
The key “outside markets” today see Nymex crude oil prices solidly higher and trading around $52.50 a barrel, on the Oman Gulf news. Still, worldwide supply and demand fundamentals for crude oil favor the bears. Meantime, the U.S. dollar index is near steady in early U.S. trading.
In other overnight news, Switzerland’s central bank held its monetary policy steady, but did signal rate cuts are possible at future central bank monetary policy meetings.
U.S. economic data due for release Thursday is light and includes the weekly jobless claims report, and import and export prices.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have some momentum to suggest still more gains and a challenge of the recent highs. The 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 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 this week’s high of 2,915.75 and then at 2,930.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,871.50 and then at 2,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the firm overall 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 7,626.25 and then at 7,666.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at today’s low of 7,446.25 and then at 7,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are modestly higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 154 6/32 and then at the contract high of 155 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight 153 19/32 and then at 153 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 in early U.S. trading. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term support lies at the overnight low of 126.31.5 and then at 126.24.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 127.08.0 and then at the contract high of 127.19.5. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is near steady in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded recently to suggest the USDX has put in a market top. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at 96.595 and then at 96.925. Shorter-term support is seen at this week’s low of 96.035 and then at last week’s low of 95.890. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
July Nymex crude oil prices are solidly higher in early U.S. trading, on rising tensions in the Persian Gulf. Still, bears are in near-term technical control. A price downtrend is in place on the daily chart. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below 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 $53.11 and then at $54.00. Look for sell stops just below technical support at $52.00 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were firmer overnight, with corn up 2 to 5 cents, soybeans up around 3 cents and steady to 1 cent lower. There was some follow-through buying interest from Wednesday’s good gains, which were led by a solid advance in soybean prices. Focus late this week is on late-planted U.S. corn and soybean crops that will find it very hard to reach trend-line yield potential. The USDA on Tuesday dramatically lowered the U.S. average corn yield, with many thinking the agency could do the same for soybeans in its next supply and demand update. The late-June U.S. updated acreage and stocks reports from USDA will be a major data point for grain futures traders. Weather in the U.S. Midwest has been generally dry, but cooler and wetter weather is in the forecast and that favors the grain market bulls, as there are still concerns about wet soils and a lack of heat that the crops need in summertime. Traders will also closely examine today’s weekly USDA export sales report to get a gauge on worldwide demand for U.S. grains. Another element working in favor of the grain market bulls is the fact the big, speculative “fund” futures traders may have been “wrong-footed,” as prices have rallied when most of the funds were short the markets. Those shorts are being squeezed at present, and more price gains will force them to buy back their short positions, to drive prices still higher.
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