Daily Morning Report

Wednesday, May 31–Jim Wyckoff’s morning markets report

Asian and European stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

Traders at mid-week are focusing on weaker-than-expected economic data coming out of China. China’s factory activity contracted for the second straight month. The official purchasing managers index (PMI) for May dropped to 48.8 (below expectations) after a reading of 49.2 in April. A reading below 50.0 suggests contraction in the sector. A report in the Wall Street Journal today said “China’s era of rapid growth is over. Its recovery from zero-Covid is stalling. And now the country is facing deep, structural problems in its economy.” China is a major importer and consumer of raw commodities.

Even though Democrat and Republican leaders’ negotiators have agreed upon a U.S. debt-limit-extension package, the deal still needs to pass the U.S. House and Senate. There are still some worries the measure will not be approved by both bodies. June 5 is the latest deadline set by the U.S. Treasury for the U.S. government debt limit to be extended, or else the government could default on some of its financial obligations.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are lower, hit a nearly four-week low, and are trading around $68.00 a barrel. Concerns about weaker global energy demand have hit crude oil hard this week. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.646%. 

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Johnson Redbook retail sales index, the Chicago ISM business survey, and the Federal Reserve’s beige book. The U.S. data pace really picks up the rest of this week, highlighted by the U.S. employment situation report from the Labor Department on Friday morning. 

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are weaker on profit taking after hitting a nine-month high Tuesday. The 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 is above 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 this week’s high of 4,285.25 and then at 4,300.00. Support for active traders is seen at 4,225.00 and then at 4,200.00. Wyckoff’s Intra-day Market Rating: 4.5

September Nasdaq index futures: Prices are slightly lower higher in early U.S. trading, on profit taking after hitting a contract high Tuesday. 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 bearish early today. Shorter-term technical resistance is seen at the contract high of 14,737.00 and then at 14,900.00. On the downside, shorter-term support is seen at 14,400.00 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 4.5.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are higher on short covering after hitting a 2.5-month low last week. 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 technical resistance is seen at 129 even and then at 130 even. Shorter-term support lies at the overnight low of 127 14/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are higher on short covering after hitting a nine-week low last week. 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 114.16.0 and then at 114.24.0. Shorter-term technical support is seen at the overnight low of 114.00.0 and then at 113.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

EURO CURRENCY

The September Euro currency futures are lower and hit a 2.5-month low overnight. 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 bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0813 and then at 1.0900. Shorter-term support is seen at the overnight low of 1.0727 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

July Nymex crude oil prices are lower and hit a nearly four-week low in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $69.69 and then at $71.00. Look for sell stops just below technical support at the overnight low of $67.30 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were lower overnight. Weak economic data coming out of China and the big drop in crude oil prices this week are bearish for the grains. The near-term technical postures for soybeans, meal, bean oil, wheat and corn futures are all overall bearish—and bears have gained fresh downside momentum at mid-week. A fledgling weather market in the grains appears to have quickly fizzled out.  

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 30–Jim Wyckoff’s morning markets report

Asian and European stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor attitudes are more upbeat to start the U.S. trading week. Republican and Democratic leaders have agreed upon a deal to raise the U.S. government’s debt limit. House and Senate votes on the matter are likely to occur this week. 

In overnight news, the World Gold Council reported its survey shows 24% of central banks intend to increase their gold holdings in 2023. Reasons include higher inflation, geopolitical turmoil and interest rate worries.

The key outside markets today see the U.S. dollar index weaker on a corrective pullback after hitting a two-month high last week. Nymex crude oil prices are lower and trading around $71.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.725%. 

U.S. economic data due for release Tuesday includes the monthly house price index, the S&P Core Logic house indexes, the consumer confidence index and the Texas manufacturing outlook survey.

–Jim

U.S. STOCK INDEXES

September S&P 500 e-mini futures: Prices are higher and hit a nine-month high in early U.S. trading. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,300.00 and then at 4,325.00. Support for active traders is seen at 4,250.00 and then at 4,225.00. Wyckoff’s Intra-day Market Rating: 6.5

September Nasdaq index futures: Prices are solidly higher in early U.S. trading and hit a contract 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 bullish early today. Shorter-term technical resistance is seen at 14,800.00 and then at 14,900.00. On the downside, shorter-term support is seen at 14,500.00 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 7.0.

U.S. TREASURY BONDS AND NOTES FUTURES

September U.S. T-Bonds: Prices are solidly higher on short covering after hitting a 2.5-month low last week. 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 technical resistance is seen at 128 even and then at 129 even. Shorter-term support lies at 126 16/32 and then at 126 even. Wyckoff’s Intra-Day Market Rating: 6.5

September U.S. T-Notes: Prices are solidly higher on short covering after hitting a nine-week low last week. 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 114.00.0 and then at 114.08.0. Shorter-term technical support is seen at 113.16.0 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

EURO CURRENCY

The September Euro currency futures are near steady after hitting a nine-week low overnight. 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 1.0850 and then at 1.0900. Shorter-term support is seen at the overnight low of 1.0740 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

July 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 and 18-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 $73.55 and then at $74.00. Look for sell stops just below technical support at last week’s low of $70.67 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were steady to lower overnight. On tap today is the weekly USDA export inspections and crop progress reports. The near-term technical postures for soybeans, meal, bean oil, and wheat corn futures are all still overall bearish. However, corn bulls have gained momentum to suggest a market bottom is in place.

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

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

Thursday, May 25–Jim Wyckoff’s morning markets report

Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed to firmer openings when the New York day session begins. The marketplace is getting more anxious as U.S. lawmakers and the Biden administration have not come to an agreement to extend the government debt limit. U.S. Treasury Secretary Yellen has said the government could run out of money by June 1.

Reports said the Fitch credit-rating agency put the U.S. on watch for a possible downgrade. “Fitch still expects a resolution to the debt limit before the X-date (1 June),” the credit agency said in a report. Both Fitch and Moody’s currently rate the U.S. debt at top AAA and Aaa, respectively, while S&P ranks it at AA+ after a downgrade in 2011 amid debt-ceiling negotiations during that time.

In other overnight news, Germany’s economy, the workhorse of the European Union, slipped into recession in the first quarter. Germany’s 1Q GDP was revised to -0.3%. The German economy contracted by 0.5% in the fourth quarter of 2022.

The key outside markets today see the U.S. dollar index firmer hitting another two-month high overnight. Nymex crude oil prices are lower and trading around $73.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 3.7%. 

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the second estimate of first-quarter GDP, pending home sales and the Kansas City Fed manufacturing survey.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are 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 to bearish early today. Today, shorter-term technical resistance comes in at 4,200.00 and then at the February high of 4,244.00. 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: 6.0

June Nasdaq index futures: Prices are solidly higher in early U.S. trading. 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 this week’s high of 13,979.25 and then at 14,100.00. On the downside, shorter-term support is seen at this week’s low of 13,566.50 and then at 13,400.00. Wyckoff’s Intra-Day Market Rating: 6.5.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are lower and hit 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 bearish early today. Shorter-term technical resistance is seen at 127 even and then at this week’s high of 127 24/32. Shorter-term support lies at the overnight low of 125 29/32 and then at 125 even. Wyckoff’s Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are lower and hit a nine-week 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight 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 113.00.0 and then at 112.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The June Euro currency futures are lower and hit a two-month low in early U.S. trading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0770 and then at this week’s high of 1.0848. Shorter-term support is seen at 1.0700 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

July 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish 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 Tuesday’s low of $71.71 and then at this week’s low of $70.67. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were mixed overnight. On tap today is the weekly USDA export sales report. Risk aversion in the marketplace over the U.S. debt-extension impasse and worries about rising Covid cases in China are bearish for the grains. The near-term technical postures for soybeans, meal, bean oil, wheat and corn futures are all still bearish. However, corn bulls have momentum to suggest a market bottom is in place.       

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