Tuesday, June 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
The world marketplace is taking in stride the apparent positive conclusion of the summit meeting on denuclearization between U.S. President Donald Trump and North Korean President Kim Jong Un. World stock markets were mixed to weaker after the meeting, with U.S. stock indexes set to open slightly lower when the New York day session begins.
Gold, U.S. Treasuries and the world currency markets were showing muted reactions to the summit’s conclusion—probably because traders and investors realize there are going to be lots of twists and turns on the road to complete denuclearization of North Korea, but still reckon this is a good start.
Attention will quickly turn to the Federal Reserve’s Open Market Committee (FOMC) meeting that begins today 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.
The European Central Bank also 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. By the end of the year the spread between key U.S. and Euro zone interest rates is expected to be around 3.0%.
Also on tap today is the U.S. consumer price index (CPI) for May. CPI is expected to come in up 0.2% from April and up 2.7%, year-on-year.
The key “outside markets” today find Nymex crude oil prices slightly higher and trading just above $66.00 a barrel. The U.S. dollar index is slightly lower today.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, the consumer price index, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. Prices hit a three-month high on Monday. 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 bearish early today. Today, shorter-term technical resistance comes in at Monday’s high of 2,794.25 and then at 2,800.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,755.75 and then at last week’s low of 2,733.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
September Nasdaq index December futures: Prices are slightly lower in early U.S. trading, and not far below last week’s contract high. Shorter-term moving averages (4- 9-and 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at Monday’s high of 7,211.75 and then at last week’s contract high of 7,258.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 7,150.75 and then at 7,125.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bears 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 bearish early today. Shorter-term technical resistance is seen at Monday’s high of 143 6/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 142 18/32 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: 4.5
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 Monday’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 Monday’s low of 119.11.0 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.495 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 higher 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $66.59 and then at $67.00. Look for sell stops just below technical support at the overnight low of $66.00 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were firmer overnight, on corrective rebounds from recent selling pressure. The positive conclusion to the U.S.-North Korea summit is also supportive for the grains. Still, U.S. ag trade worries and good growing weather in the U.S. Corn Belt at present are bearish. Traders are awaiting Tuesday morning’s USDA monthly supply and demand report.