Thursday, June 25–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to lower in overnight trading. U.S. stock indexes are pointed toward steady to weaker openings when the New York day session begins, following strong losses Wednesday. The Covid-19 pandemic appears to be spreading at a more alarming rate again in many countries, including the U.S. That has sapped trader and investor confidence late this week.
Many health experts are saying two months of progress in the U.S. has been thrown out the window because businesses opened up too early and Americans are not being vigilant enough because they got “Covid-fatigue.” It seems unlikely the U.S. will get locked down to the degree seen in the spring. Still, the worrisome rise in infections the past couple weeks could bring a halt to the rapid U.S. economic recovery seen since businesses started reopening. That is what has the U.S. stock indexes selling off.
Another concern for the marketplace is rumblings the U.S. could implement more trade tariffs against the European Union and the U.K. The U.S. and China (the world’s two largest economies) already have strained relations on trade and other matters.
There is also trader talk the marketplace is beginning to sense President Trump is in real danger of losing his re-election bid in November. A win by the Democrat, Joe Biden, would probably see corporate and wealthy American tax increases as well as more regulations on businesses—bearish for the stock market.
The important outside markets today see Nymex crude oil prices weaker and trading around $37.75 a barrel. The U.S. dollar index is up early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
It’s a busy day for U.S. economic data Thursday, including the weekly jobless claims report, the third estimate for first-quarter gross domestic product, the advance economic indicators report, durable goods orders and the Kansas City Fed manufacturing survey.
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U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading as trading has been sideways recently. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below 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 the overnight high of 3,056.00 and then at 3,100.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 3,005.00 and then at 2,975.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls remain in firm technical command. 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 to bearish early today. Shorter-term technical resistance is seen at 10,150.00 and then at the record high of 10,296.25. On the downside, shorter-term support is seen at this week’s low of 9,843.50 and then at 9,700.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are up and hit a four-week high in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 178 17/32 and then at 179 even. Shorter-term support lies at the overnight low of 178 1/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 6.0
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls still have the solid near-term technical advantage as prices trade sideways at higher levels. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at 139.03.0 and then at 139.10.0. Shorter-term technical support lies at the overnight low of 138.27.5 and then at 138.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is higher in early U.S. trading. Bears have the overall near-term technical advantage but the bulls have stabilized the market. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above 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 this week’s high of 97.700 and then at 98.000. Shorter-term support is seen at the overnight low of 97.135 and then at 97.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
August Nymex crude oil prices are lower in early U.S. trading on a corrective pullback after hitting a nearly four-month high on Tuesday. Bulls are fading a bit. A price uptrend is still in place on the daily chart. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $38.46 and then at $39.00. Look for sell stops just below technical support at $37.00 and then at $36.00. Wyckoff’s Intra-Day Market Rating: 4.0
US grain futures are mixed in early U.S. pre-market trading. On tap today is the weekly USDA export sales report. Grain market bears are firmly in control to suggest sideways to lower price action in the near term. The only thing that will rescue the bulls is a weather market developing in the U.S. Corn Belt in the coming weeks, which the long-term weather forecasts are not seeing at this time.
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.