Thursday, June 6–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
European stock markets traded near steady Thursday as traders and investors awaited the results of the monthly monetary policy meetings of the European Central Bank and Bank of England. The BOE has just announced no change in its interest rates. Neither central bank was expected to make any major policy announcements or interest rate changes. Japan’s Nikkei stock index fell again Thursday, dropping below the 13,000 level for the first time since April. In the U.S., traders will scrutinize Thursday’s fresh batch of U.S. economic data, but will quickly turn their focus to Friday’s employment report, which is arguably the most important monthly economic report the government releases. Forecasts call for the key non-farm payrolls figure to have grown by around 170,000 in May, while the overall unemployment rate is expected to be steady from the previous month, at 7.5%. U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cut report, and ICSC chain store sales trends.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today. Bulls still have the overall near-term technical advantage but have faded 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 1,625.00 and then at Wednesday’s high of 1,632.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,605.50 and then at 1,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are firmer early today. Bulls have the overall near-term technical advantage but have faded. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at 2,950.00 and then at 2,961.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 2,932.00 and then at 2,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are firmer early today. Bulls still have the overall near-term technical advantage, but have faded. Buy stops likely reside just above technical resistance at 15,000 and then at 15,050. Sell stops likely reside just below technical support at Wednesday’s low of 14,945 and then at 14,900. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer early today on more short covering in a bear market. Bears still have the overall near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 141 12/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 140 20/32 and then at 140 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are firmer again early today on more short covering in a bear market. Bears still have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at Wednesday’s high of 129.24.5 and then at this week’s high of 129.30.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129.15.5 and then at Wednesday’s low of 129.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The U.S. dollar index is lower in early U.S. trading and hit a four-week low overnight. Bulls are fading badly. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.690 and then at 83.000. Shorter-term support is seen at the overnight low of 82.370 and then at 82.250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are firmer early today. Bulls and bears are still on a level near-term technical playing field. In July Nymex crude, look for buy stops to reside just above resistance at this week’s high of $94.48 and then at $95.00. Look for sell stops just below technical support at the overnight low of $93.69 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mixed but mostly slightly lower in overnight trading. Traders are awaiting Thursday morning’s weekly USDA export sales report. Soybean bulls still have good upside near-term technical momentum. Corn trading remains choppy, but bulls cannot overcome stiff overhead chart resistance. Wheat bears remain in technical control. Whilerains in the U.S. Corn Belt this week, including more in the forecast, will continue to limit soybean planting progress, this market fundamental has pretty much been factored into futures prices and traders will now start to look at other fundamentals more closely. Still, given the rocky start to the U.S. planting and growing season, it would not surprise me to see the adverse weather situation continue as the weather could move from cool and wet in June to hot and dry in July.
