Wednesday, June 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were narrowly mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Attention is on the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday and ends Wednesday afternoon with a statement. It is widely expected the FOMC will raise U.S. interest rates by 0.25% at this meeting. Fed Chair Jerome Powell will have a press conference following the meeting. Traders will parse Powell’s comments for clues on the pace of future U.S. rate hikes.
The European Central Bank holds its monetary policy meeting on Thursday. No change is expected in ECB policy, but the central bank is still on a path of easy money that is keeping its interest rates very low, and diverging with those of the U.S. More weak economic data coming out of the EU today—industrial production that fell more than expected—is another clue the ECB has to keep its monetary policy very accommodative. By the end of the year the spread between key U.S. and Euro zone interest rates is expected to be around 3.0%.
The key “outside markets” today find Nymex crude oil prices slightly lower and trading just above $66.00 a barrel. The International Energy Agency said world oil demand should remain strong in 2019, growing by 1.4 million barrels per day. Meantime, the U.S. dollar index is near steady early today.
U.S. economic data due for release Wednesday include the weekly MBA mortgage applications survey, the producer price index, the weekly DOE liquid energy stocks report, and the FOMC decision.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and hit another three-month high overnight. The bulls have the firm 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at 2,800.00 and then at 2,815.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,774.00 and then at 2,755.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
September Nasdaq index December futures: Prices are higher in early U.S. trading, and just below last week’s contract high. 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 early today. Shorter-term technical resistance is seen at last week’s contract high of 7,258.00 and then at 7,280.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,200.00 and then at this week’s low of 7,150.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly higher in early U.S. trading, on short covering. Bears still have the 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 technical resistance is seen at this week’s high of 143 6/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 142 12/32 and then at last week’s low of 142 1/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bears still have the overall near-term technical advantage. 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 above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at this week’s high of 119.19.5 and then at 119.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.07.5 and then at last week’s low of 119.04.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage but need to show some fresh power soon. 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 the overnight high of 93.590 and then at last week’s high of 93.860. Shorter-term support is seen at 93.000 and then at last week’s low of 92.760. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
July Nymex crude oil prices are slightly lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $66.70 and then at $67.00. Look for sell stops just below technical support at the overnight low of $65.52 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were lower overnight. U.S. ag trade worries and good growing weather in the U.S. Corn Belt at present are bearish. However, some weather forecasters are talking about hot and dry conditions in late June, into early July.