Friday, May 26–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Trader and investor attitudes are a bit more upbeat to end the trading week, on reports that U.S. lawmakers are moving closer to a deal to raise the U.S. government’s debt limit. The Wall Street Journal reported Republican and Democrat leaders are narrowing their differences and are zeroing in on a two-year spending deal that would raise the debt limit for two years. Lawmakers are hoping to see a deal pass through Congress next week.
A feature in the marketplace Thursday was the big rally in Nvidia stock following its strong earnings report. Some stock analysts and fund managers are saying the Nvidia stock rally is a wake- up call: artificial intelligence (AI) will have a bigger impact on global society than the advent of the internet nearly 30 years ago.
The U.S. data point of the day is the personal income and outlays report for April, including the important personal consumption expenditures (PCE) price indexes. Personal income is seen up 0.4% from March. The PCE core price index is seen up 4.6%, year-on-year, which is the same as seen in the March report.
The key outside markets today see the U.S. dollar index weaker on a corrective pullback after hitting a two-month high Thursday. Nymex crude oil prices are firmer and trading around $72.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.783%.
Other U.S. economic data due for release Friday includes durable goods orders, the advance economic indicators report and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,200.00 and then at the May high of 4,227.25. Support for active traders is seen at this week’s low of 4,114.00 and then at the May low of 4,062.25. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are solidly slightly in early U.S. trading and near this week’s eight-month high. Bulls have the solid 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 neutral to bullish early today. Shorter-term technical resistance is seen at 14,150.00 and then at 14,300.00. On the downside, shorter-term support is seen at Thursday’s low of 13,803.00 and then at this week’s low of 13,566.50. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer on short covering after hitting a 2.5-month low in early U.S. trading. 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 neutral to bullish early today. Shorter-term technical resistance is seen at Thursday’s high of 126 16/32 and then at 127 even. Shorter-term support lies at the overnight low of 125 10/32 and then at 125 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher on short covering after hitting a nine-week low overnight. 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 neutral to bullish early today. Shorter-term resistance lies at Thursday’s high of 113.12.5 and then at this week’s high of 113.30.0. Shorter-term technical support is seen at the overnight low of 112.27.0 and then at 112.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are firmer on short covering after hitting a two-month low on Thursday. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.0800 and then at this week’s high of 1.0848. Shorter-term support is seen at this week’s low of 1.0721 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $74.73 and then at $75.00. Look for sell stops just below technical support at this week’s low of $70.67 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were higher overnight. Risk aversion has abated late this week and that’s a positive for the grain markets. Short covering was featured overnight. The near-term technical postures for soybeans, meal, bean oil, wheat and corn futures are all still overall bearish. However, corn bulls have momentum to suggest a market bottom is in place. It appears speculative bulls are already doing some early positioning for the first weather market scare of the growing season in corn and soybeans.
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