Daily Morning Report

Friday, May 27–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, following solid gains posted Thursday. Bullish weekly high closes in the U.S. stock indexes today would be one technical clue that near-term market bottoms are in place. Today will be an extra-important trading day for the stock indexes.

The data point of the day is the April personal income and outlays report, including the closely watched core personal consumption expenditures (PCE) component, which measures inflation. The PCE is seen coming in at up 4.9%, year-on-year, compared to the March reading of 5.2%.

China’s President Xi Jinping’s strict zero covid and other socialist policies risk severely damaging China’s economy. That apparently prompted Premier Li Keqiang’s speech to the nation this week. The premier warned China’s economy is at a critical point and called on officials to work hard for second-quarter economic growth to reduce unemployment. China watchers note it is unprecedented for a premier to challenge the policies of the president. Over 200 million Chinese citizens have been living under lockdown restrictions, which is causing increasing unrest in the world’s second-largest economy.

The key outside markets today see Nymex crude oil futures prices weaker and trading around $113.50 a barrel. Meantime, the U.S. dollar index is slightly up in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.75%.

U.S. economic data due for release Friday includes personal income and outlays, the University of Michigan consumer sentiment survey and advance economic indicators.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading, following good gains on Thursday. Prices are still in a two-month-old downtrend on the daily bar chart, but just barely.

A bullish weekly high close today would be one clue that a near-term market bottom is in place. Bears still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,050.00 and then at 4,100.00. Support for active traders is seen at 4,000.00 and then at Thursday’s low of 3,960.50. Wyckoff’s Intra-day Market Rating: 6.0

June Nasdaq index futures: Prices are slightly higher in early U.S. trading, following good gains Thursday. A bullish weekly high close today would be one clue that a near-term market bottom is in place. Prices are still in a two-month-old downtrend on the daily bar chart but now just barely. Bears still have the firm overall technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 12,400.00 and then at 12,594.00. On the downside, shorter-term support is seen at 12,200.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are higher in early U.S. trading. Bears are still in overall near-term technical control but the bulls have momentum as a fledgling price uptrend is in place. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 142 22/32 and then at 143 even. Shorter-term support lies at the overnight low of 141 17/32 and then at 141 even. Wyckoff’s Intra-Day Market Rating: 6.0

June U.S. T-Notes: Prices are higher in early U.S. trading. Bears are still in overall near-term technical control but the bulls have momentum as a fledgling price uptrend is in place. 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 resistance lies at this week’s high of 120.31.0 and then at 121.08.0. Shorter-term technical support lies at the overnight low of 120.16.0 and then at 120.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The June Euro currency futures are weaker in early U.S. trading after hitting a four-week high overnight. Bears still have the overall near-term technical advantage but the bulls have some momentum to suggest a market bottom is in place. The shorter-term moving averages for the Euro 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 for the Euro are neutral today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0772 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Nymex crude oil prices are slightly lower in early U.S. trading after hitting a 2.5-month high overnight. 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $114.99 and then at the March high of $116.33. Look for sell stops just below technical support at $112.00 and then at $110.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

U.S. grain futures prices were mixed to weaker in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage but are fading amid the generally keener risk aversion in the marketplace that has sparked heightened U.S. recession fears. Bearish weather patterns in the U.S. Midwest and Plains (rain) are also keeping the bulls at bay. It could well be that the grains will languish for the next month, awaiting a possible summertime weather market that can occur right after the Fourth of July holiday.

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

Thursday, May 26–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The U.S. stock indexes have been wobbly this week, amid geopolitical and inflation concerns.

Reports overnight said Chinese Premier Li Keqiang gave a dour warning about the world’s second-largest economy as it struggles from Covid-19 outbreaks and lockdowns. The premier said the situation is worse than 2020 when the pandemic first emerged. He urged more efforts to reduce a soaring unemployment rate. China’s supply-chain bottlenecks and the Russia-Ukraine war have driven up the prices of goods and services worldwide.

Broker SP Angel reports in an email dispatch today that inflation is causing consumers to slow their consumption of non-essential items so they can pay for fuel, energy and food. “Consumers are also increasingly wary of the risk of unemployment and are rebuilding cash and paying down debt. Companies are also postponing or even cancelling capital expansion plans as increasing input prices and variable logistics create uncertainty as the era of cheap money is coming to an end.  …Netflix seems to be an early indicator of cancelled subscriptions in response to financial stress and a dramatic fall in consumer sentiment.”

The key outside markets today see Nymex crude oil futures prices higher and trading around $111.25 a barrel. Meantime, the U.S. dollar index is weaker in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.724%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of first-quarter gross domestic product, pending home sales and the Kansas City Fed manufacturing survey.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Prices are in a two-month-old downtrend on the daily bar chart and bears have the solid near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,000.00 and then at 4,050.00. Support for active traders is seen at this week’s low of 3,872.00 and then at the May low of 3,807.50. Wyckoff’s Intra-day Market Rating: 5.5

June Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices are in a two-month-old downtrend on the daily bar chart and bears have the solid technical advantage. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen this week’s high of 12,075.50 and then at 12,250.00. On the downside, shorter-term support is seen at Thursday’s low of 11,672.00 and then at the May low of 11,491.25. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are firmer in early U.S. trading. Bears are still in overall near-term technical control but the bulls have some momentum as a price downtrend has been negated and a fledgling price uptrend is in place. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 142 22/32 and then at 143 even. Shorter-term support lies at the overnight low of 141 10/32 and then at 141 even. Wyckoff’s Intra-Day Market Rating: 5.5

June U.S. T-Notes: Prices are higher and hit a six-week high in early U.S. trading. Bears are still in overall near-term technical control but the bulls have momentum as a price downtrend has been negated and a fledgling price uptrend is in place. 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 resistance lies at 121.00.0 and then at 121.10.0. Shorter-term technical support lies at the overnight low of 120.12.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The June Euro currency futures are firmer in early U.S. trading. Bears have the overall near-term technical advantage but the bulls have some momentum to suggest a market bottom is in place. The shorter-term moving averages for the Euro 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 for the Euro are bullish today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0757 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Nymex crude oil prices are higher in early U.S. trading. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $111.96 and then at the May high of $113.20. Look for sell stops just below technical support at this week’s low of $108.61 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures prices were mixed to lower in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage but are fading amid the keener risk aversion in the marketplace that has sparked heightened U.S. recession fears. More bearish weather patterns in the U.S. Midwest are also keeping the bulls squelched. On tap today is the weekly USDA export sales report.

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

Wednesday, May 25–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. U.S. trading may be more subdued early on today, ahead of this afternoon’s release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). The marketplace will be looking for further guidance on the timing and pace of the Fed’s monetary policy tightening cycle, and on inflation prospects. Trading could become more active in the immediate aftermath of the 2:00 p.m. EDT release of the FOMC minutes.

The key outside markets today see Nymex crude oil futures prices higher and trading around $111.25 a barrel. Meantime, the U.S. dollar index is higher in early trading, on a corrective bounce from recent strong selling pressure. The yield on the 10-year U.S. Treasury note is fetching 2.729%. U.S. Treasury yields have been falling this week on a flight to quality move amid heightened concerns about the U.S. economy falling into recession.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, the weekly DOE liquid energy stocks report and the minutes from the last FOMC meeting.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Prices are in a seven-week-old downtrend on the daily bar chart and bears have the solid near-term technical advantage. 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 early today. Today, shorter-term technical resistance comes in at this week’s high of 3,982.25 and then at 4,000.00. Support for active traders is seen at this week’s low of 3,872.00 and then at the May low of 3,807.50. Wyckoff’s Intra-day Market Rating: 4.5

June Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices are in a seven-week-old downtrend on the daily bar chart and bears have the solid technical advantage. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 11,892.50 and then at this week’s high of 12,075.50. On the downside, shorter-term support is seen at the May low of 11,491.25 and then at 11,200.00. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bears are still in overall near-term technical control but the bulls have momentum as a price downtrend has been negated and a fledgling price uptrend is in place. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 142 16/32 and then at 143 even. Shorter-term support lies at 141 even and then at this week’s low of 140 1/32. Wyckoff’s Intra-Day Market Rating: 5.0

June U.S. T-Notes: Prices are slightly higher in early U.S. trading. Bears are still in overall near-term technical control but the bulls have momentum as a price downtrend has been negated and a fledgling price uptrend is in place. 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 this week’s high of 120.22.0 and then at 121.00.0. Shorter-term technical support lies at 120.00.0 and then at this week’s low of 119.15.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

EURO CURRENCY

The June Euro currency futures are lower in early U.S. trading, on a corrective pullback from recent good gains. Bears have the overall near-term technical advantage but the bulls have some momentum to suggest a market bottom is in place. The shorter-term moving averages for the Euro 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 for the Euro are neutral to bearish today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0757 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Nymex crude oil prices are higher in early U.S. trading. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $111.96 and then at the May high of $113.20. Look for sell stops just below technical support at this week’s low of $108.61 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures prices were lower in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage but the keener risk aversion in the marketplace that has sparked heightened U.S. recession fears and more bearish weather patterns in the U.S. Midwest are keeping the bulls squelched at mid-week.

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

Tuesday, May 24–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. stock indexes are in or near bear market territory, defined as 20% or more below their recent highs. Geopolitical and inflation worries are keeping equities market bulls squeamish.

In overnight news, China laid out a comprehensive plan to shore up its economy that has been hit hard by Covid lockdowns. The marketplace was unimpressed and showed little reaction to the plans.

Later today, Fed Chairman Jerome Powell will deliver remarks at an economic summit in Las Vegas.

The key outside markets today see Nymex crude oil futures prices slightly higher and trading around $110.50 a barrel. Meantime, the U.S. dollar index is sharply weaker and hit a four-week low in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.797%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail reports, the U.S. flash manufacturing purchasing managers index (PMI), the flash services PMI, the Richmond Fed business survey, new residential sales and the ISM semiannual economic forecast.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are in a seven-week-old downtrend on the daily bar chart and bears have the solid near-term technical advantage. 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 early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,982.25 and then at 4,000.00. Support for active traders is seen at 3,900.00 and then at 3,855.00. Wyckoff’s Intra-day Market Rating: 4.0

June Nasdaq index futures: Prices are lower in early U.S. trading. Prices are in a seven-week-old downtrend on the daily bar chart and bears have the solid technical advantage. 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 average is below 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 12,075.50 and then at 12,250.00. On the downside, shorter-term support is seen at the overnight low of 11,783.75 and then at 11,689.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are higher in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 141 11/32 and then at the May high of 142 2/32. Shorter-term support lies at Monday’s low of 140 1/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 6.0

June U.S. T-Notes: Prices are higher in early U.S. trading. Bears are in overall near-term technical control. 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 120.00.0 and then at the May high of 120.10.0. Shorter-term technical support lies at Monday’s low of 119.15.5 and then at 119.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The June Euro currency futures are firmer in early U.S. trading. Bears still have the overall near-term technical advantage but the bulls have gained momentum to suggest a market bottom is in place. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0745 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Nymex crude oil prices are a bit higher in early U.S. trading. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $111.96 and then at the May high of $113.20. Look for sell stops just below technical support at the overnight low of $108.61 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures prices were mixed to firmer in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage and continue to benefit from the “inflation trade” and global grain shortage due to the Russia-Ukraine war. Weather patterns in the U.S. Midwest will also be main market drivers for the next few months.

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

Monday, May 23–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed but mostly up overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock index bulls are still on the ropes as the major indexes last week hit 12-month lows and are at or flirting with bear market territory—meaning prices 20% down from their recent highs.

Trader and investor risk appetite up-ticked a bit to start the trading week on reports the U.S. may consider lifting some trade tariffs on China. Meantime, China continues to struggle with rising Covid cases that have locked down parts of major cities in the world’s second-largest economy.

In other overnight news, European Central Bank President Christine Lagarde said the ECB will likely raise interest rates at its July meeting.

U.S. President Joe Biden is on an Asian tour and Monday laid out a new economic cooperation platform called the Indo-Pacific Economic Framework.

The key outside markets today see Nymex crude oil futures prices higher and trading around $111.50 a barrel. Meantime, the U.S. dollar index is sharply down and hit a nearly four-week low in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.815%.

U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index. The data pace picks up rapidly Tuesday.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are higher in early U.S. trading, on short covering as prices are not far above last Friday’s 12-month low. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid near-term technical advantage. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,955.00 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,910.25 and then at 3,855.00. Wyckoff’s Intra-day Market Rating: 6.0

June Nasdaq index futures: Prices are higher in early U.S. trading, on short covering after hitting Friday’s 12-month low. Prices are in a six-week-old downtrend on the daily bar chart and bears have the solid technical advantage. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at Friday’s high of 12,096.75 and then at 12,400.00. On the downside, shorter-term support is seen at the overnight low of 11,963.25 and then at 11,689.00. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 141 22/32 and then at the May high of 142 2/32. Shorter-term support lies at Friday’s low of 140 7/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are lower in early U.S. trading. Bears are in overall near-term technical control. 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 bearish early today. Shorter-term resistance lies at the overnight high of 120.03.5 and then at the May high of 120.10.0. Shorter-term technical support lies at the overnight low of 119.21.5 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The June Euro currency futures are sharply higher in early U.S. trading. Bears still have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish today. The Euro currency finds shorter-term technical resistance at 1.0700 and then at 1.0750. Shorter-term support is seen at 1.0600 and then at the overnight low of 1.0569. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

Nymex crude oil prices are higher in early U.S. trading. 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 bullish early today. Look for buy stops to reside just above technical resistance at the May high of $113.20 and then at $115.00. Look for sell stops just below technical support at the overnight low of $109.51 and then at $108.00. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

U.S. grain futures prices were higher in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage. Weather patterns in the U.S. Midwest will be main market drivers for the next few months. On tap today is the weekly USDA export inspections report.

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