Monday, May 9–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. The S&P 500 and Nasdaq futures markets hit 12-month lows overnight. The U.S. stock index bears have the solid near-term technical advantage as prices are in downtrends on the daily bar charts.
A feature in the marketplace early this week is rising bond yields. The yield on the 10-year U.S. Treasury note is at a nearly four-year high and is presently fetching 3.180%. Traders and investors fear that global price inflation has gotten out of control. Historically, problematic price inflation is bearish for paper assets like stocks and bonds, and bullish for hard assets like raw commodities and real estate.
In overnight news, China’s trade numbers have withered amid the world’s second-largest economy dealing with major Covid lockdowns. China’s exports in April were up just 3.9% compared to a rise of 14.7% in March. The April figure was the lowest in two years. Imports were down 0.1% in April.
The key outside markets today sees Nymex crude oil futures prices solidly lower and trading around $107.50 a barrel. The proposed Russian oil ban by European Union countries is running into snags, reports said. Meantime, the U.S. dollar index is higher in early trading.
U.S. economic data due for release Monday includes the employment trends index and monthly wholesale trade data.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly lower and hit a 12-month low in early U.S. trading. Prices are in a 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,099.00 and then at Friday’s high of 4,153.25. Support for active traders is seen at 4,000.00 and then at 3,950.00. Wyckoff’s Intra-day Market Rating: 3.0
June Nasdaq index futures: Prices are solidly lower and hit a 12-month low 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 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 the overnight high of 12,637.25 and then at 12,800.00. On the downside, shorter-term support is seen at 12,250.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 3.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly lower and hit a contract low in early U.S. trading. Bears are in solid technical control. 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 technical resistance is seen at the overnight high of 136 16/32 and then at 137 even. Shorter-term support lies at the overnight contract low of 134 30/32 and then at 134 even. Wyckoff’s Intra-Day Market Rating: 3.5
June U.S. T-Notes: Prices are lower and hit a contract low in early U.S. trading. Bears are in solid near-term technical control. 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 117.27.0 and then at 118.00.0. Shorter-term technical support lies at the overnight contract low of 117.08.5 and then at 117.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The June Euro currency futures are slightly lower 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. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish neutral today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0658 and then at 1.0700. Shorter-term support is seen at the contract low of 1.0490 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are solidly 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 $108.00 and then at $110.00. Look for sell stops just below technical support at $106.00 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures prices were mixed to lower in early U.S. pre-market trading. Weather forecasts for the Corn Belt and wheat country have turned bearish. Drier and warmer weather is entering the Corn Belt in the coming days, which will allow for rapid corn and soybean planting progress. Meantime, some beneficial precipitation in the U.S. hard red winter wheat country will provide some relief to suffering wheat crops. Grain market bulls still have the near-term chart advantage. 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