The wheat futures markets just recently screamed to contract and even multi-year highs. However, the past few trading sessions have seen the wheat markets drop sharply amid steep daily losses. The price downdraft begins to suggest the wheat futures markets have put in least near-term tops, if not major tops. Importantly, wheat has taken over leadership in the grain markets. As goes wheat, so likely will also go corn and soybeans—at least for the near term. Stay tuned! —Jim Wyckoff
Daily Morning Report
China easing monetary policy boosts equities
Friday, May 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The major stock indexes are not far above their 12-month lows scored recently. Trader and investor risk appetite, on good days, remains tepid at best. A Wall Street Journal headline today read, “Recession trade is on as market pain spreads beyond tech.”
In overnight news, China’s central bank Friday cut a key lending rate, its prime five-year loan rate, by a greater-than-expected 0.15% in a move to boost China’s sagging real estate market. The easing from the central bank of the world’s second-largest economy did buoy global stock markets.
The key outside markets today see Nymex crude oil futures prices a bit higher and trading around $112.50 a barrel. Meantime, the U.S. dollar index is a bit firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.864%.
There is no major U.S. economic data due for release day Friday.
–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 the recent 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 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at 3,975.00 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,898.25 and then at the May low of 3,855.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are higher in early U.S. trading and not far above the recent 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 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 neutral to bullish early today. Shorter-term technical resistance is seen at 12,200.00 and then at 12,400.00. On the downside, shorter-term support is seen at the overnight low of 11,895.00 and then at the May low of 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 near steady in early U.S. trading. Bulls have had a good week but bears are still 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 early today. Shorter-term technical resistance is seen at the overnight high of 141 2/32 and then at this week’s high of 142 2/32. Shorter-term support lies at 140 even and then at 139 even. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are near steady in early U.S. trading. Bears are in overall near-term technical control but the bulls have some momentum. 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 neutral early today. Shorter-term resistance lies at 120.00.0 and then at this week’s high of 120.10.0. Shorter-term technical support lies at the overnight low of 119.16.5 and then at 119.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the solid 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 neutral today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0617 and then at 1.0650. Shorter-term support is seen at the overnight low of 1.0564 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
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. 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 $114.00 and then at this week’s high of $115.56. Look for sell stops just below technical support at $110.00 and then at $108.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading. Grain market have faded late this week but bulls still have the overall near-term chart advantage. Wheat is on shaky ground now, however. If wheat prices continue to drop, buying interest in corn and soybeans will also be limited.
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
Stock market bulls in trouble again
Thursday, May 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins, on follow-through selling pressure from Wednesday’s big losses that saw the S&P 500 put in its worst daily performance in almost two years. Heightened worries about corporate earnings have hit the marketplace this week after Wal Mart and Target posted dismal earnings results. Both companies cited inflation as the main culprit for their dour earnings numbers. An economic recession in the U.S. is now on the minds of traders and investors who were already saddled with other concerns, including the Russia-Ukraine war and Covid cases causing major cities in China to be on lockdown, which is disrupting global trade.
The key outside markets today see Nymex crude oil futures prices lower and trading around $108.00 a barrel. Meantime, the U.S. dollar index is lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.859%.
U.S. economic data due for release day Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales and leading economic indicators.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading and near the recent 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 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,933.25 and then at 4,000.00. Support for active traders is seen at the May low of 3,855.00 and then at 3,800.00. Wyckoff’s Intra-day Market Rating: 3.5
June Nasdaq index futures: Prices are lower in early U.S. trading and near the recent 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 bearish early today. Shorter-term technical resistance is seen at 12,000.00 and then at 12,250.00. On the downside, shorter-term support is seen at the May low of 11,689.00 and then at 11,500.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher and hit a three-week high in early U.S. trading. Bears are in firm overall near-term technical control but the bulls have momentum. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 technical resistance is seen at the overnight high of 141 12/32 and then at 142 even. Shorter-term support lies at the overnight low of 139 23/32 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 firm overall near-term technical control but the bulls have some momentum. 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 119.00.0 and then at 119.10.0. Shorter-term technical support lies at the overnight low of 119.06.0 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are higher in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-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 this week’s high of 1.0575 and then at 1.0600. Shorter-term support is seen at the overnight low of 1.0471 and then at this week’s low of 1.0401. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $110.90 and then at $112.50. Look for sell stops just below technical support at the overnight low of $106.70 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were mixed but mostly lower in early U.S. pre-market trading. Grain market bulls still have the firm overall near-term chart advantage. 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
Gold trapped in a downtrend
The gold market is presently in a nine-week-old downtrend on the daily bar chart and the bears have the solid near-term technical advantage. The yellow metal bulls are perplexed that their safe-haven metal is not performing better amid heightened trader and investor uncertainty in the marketplace due to geopolitical events at play. The gold bulls will have to produce multiple closes back above key chart resistance at $1,850.00 to regain power to then suggest an uptrend could be sustained. Stay tuned! —Jim Wyckoff
Powell talks tough on inflation
Wednesday, May 18–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, on corrective pullbacks following gains on Tuesday. Traders and investors remain tentative at mid-week on new reports that Covid continues to spread in China, after reports earlier this week that said China’s government could ease up on its lockdowns.
Federal Reserve Chairman Jerome Powell on Tuesday afternoon reiterated the central bank’s main goal is to tamp down inflation, even if it means pushing up the unemployment rate. He said the Fed “has the tools and resolve” to cool inflation. The marketplace read his latest comments as maybe not surprising but certainly hawkish.
In overnight news, U.K. inflation hit a 40-year high as consumer prices in April rose 9%, year-on-year. Euro zone inflation was also reported Wednesday and its consumer price index for April was up 7.4% on an annual basis.
The key outside markets today see Nymex crude oil futures prices firmer and trading around $114.00 a barrel. Meantime, the U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.975%.
U.S. economic data due for release day Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Prices are in a six-week-old downtrend on the daily bar chart and bears have the firm 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 neutral early today. Today, shorter-term technical resistance comes in at 4,100.00 and then at 4,150.00. Support for active traders is seen at 4,030.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Prices are trending down on the daily bar chart and bears have the solid 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 12,594.00 and then at 12,700.00. On the downside, shorter-term support is seen at this week’s low of 12,190.25 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Bears are in solid overall near-term technical control. 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 below 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 138 28/32 and then at Tuesday’s high of 139 26/32. Shorter-term support lies at 138 even and then at 137 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker in early U.S. trading. Bears are in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 119.00.0 and then at 119.10.0. Shorter-term technical support lies at 118.16.0 and then at 118.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0575 and then at 1.0600. Shorter-term support is seen at 1.0500 and then at Tuesday’s low of 1.0439. Wyckoff’s Intra Day Market Rating: 4.5
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 this week’s high of $115.56 and then at $117.00. Look for sell stops just below technical support at Tuesday’s low of $111.75 and then at $110.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, on corrective pullbacks from early-week gains. Grain market bulls still have the firm overall near-term chart advantage. Wheat had taken over leadership in the bullish camp but is now seeing heavy profit-taking pressure at mid-week after prices soared higher earlier this 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
Easing Covid lockdowns in China assuage stock markets
Tuesday, May 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The marketplace is more upbeat Tuesday on reports China will start to ease its lockdowns in major cities, including Hong Kong and Shanghai.
The marketplace will be watching a scheduled Wall Street Journal interview with Fed Chairman Jerome Powell this afternoon. Traders and investors will be keen to see if Powell remarks on timing aspects of Fed monetary policy and/or inflation, as well as the prospect of the U.S. economy entering a recession.
In overnight news, the Eurozone economy grew by 0.3% in the first quarter and GDP was up 5.1%, year-on-year. Those numbers were slightly better than expected.
The key outside markets today see Nymex crude oil futures prices firmer, at a nine-week high and trading around $115.00 a barrel. Meantime, the U.S. dollar index is lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.915%.
A busy U.S. economic data release day Tuesday includes the weekly Johnson redbook and chain store retail reports, retail sales, industrial production and capacity utilization, the NAHB housing market index, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading. Prices are still in a six-week-old downtrend on the daily bar chart and bears have the firm 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 4,100.00 and then at 4,150.00. Support for active traders is seen at 4,050.00 and then at the overnight low of 4,000.50. Wyckoff’s Intra-day Market Rating: 6.5
June Nasdaq index futures: Prices are solidly higher in early U.S. trading. Prices are still trending down 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 12,600.00 and then at 12,750.00. On the downside, shorter-term support is seen at the overnight low of 12,234.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in solid overall near-term technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 140 13/32 and then at the May high of 141 3/32. Shorter-term support lies at Monday’s low of 138 25/32 and then at 138 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 solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Monday’s high of 119.27.5 and then at the May high of 120.00.5. Shorter-term technical support lies at Monday’s low of 119.01.5 and then at 118.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are solidly higher on more short covering. Bears still have the solid overall near-term technical advantage. 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 bullish today. The Euro currency finds shorter-term technical resistance 1.0600 and then at 1.0658. Shorter-term support is seen at overnight low of 1.0439 and then at the contract low of 1.0361. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a nine-week high 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 overnight high of $115.43 and then at $117.00. Look for sell stops just below technical support at $112.00 and then at $110.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, on corrective pullbacks from Monday’s solid gains. Grain market bulls still have the firm overall near-term chart advantage. Wheat has taken over leadership in the bullish camp and sees HRW prices at a 14-year high this 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