Tuesday, May 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly flat overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. With no major geopolitical fires burning at present and Covid-19 mostly tamped down in most major economies, focus of traders and investors is on mostly upbeat quarterly corporate earnings reports and the still-easy monetary policies of the major central banks of the world. Those are bullish elements for the equities markets. So far, the markets are not paying much attention to the Covid crisis in India that continues to grow in magnitude.
In overnight news, Australia’s central bank left its monetary policy unchanged at its regular meeting Tuesday. The Royal Bank of Australia said it expects no rise in its interest rates until at least 2024. The RBA did not portray inflation as becoming problematic.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher, hit a six-week high, and are trading around $65.60 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.621%. For perspective, the German 10-year bund is yielding -0.192% and the U.K. gilt is at 0.837%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the international trade report, the IBD/TIPP economic optimism index, and manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading and still near last week’s contract and record high. Bulls have the strong overall near-term technical advantage. There are no early clues to suggest a market top is close at hand. 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 the record high of 4,211.00 and then at 4,230.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last week’s low of 4,163.75 and then at 4,150.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are weaker and hit a two-week low in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,792.50 and then at Monday’s high of 13,947.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,700.50 and then at 13,600.00. Sell stops likely reside just below those levels. 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 today. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Monday’s high of 158 10/32 and then at the April high of 159 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 156 21/32 and then at last week’s low of 156 6/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 132.11.5 and then at this week’s high of 132.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.00.0 and then at 131.24.0. 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-week low in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.2086 and then at 1.2100. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2000 and then at 1.1950. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher and hit a seven-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 $66.00 and then at $67.00. Look for sell stops just below technical support at the overnight low of $64.29 and then at this week’s low of $62.91. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures are higher to solidly higher in early U.S. pre-market trading, with corn leading the day. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place on the daily and the longer-term charts and prices near multi-year highs. Sellers in the grains are few, given the generally tight world supply and demand balance and the onset of the U.S. growing season for corn and soybeans. Stay tuned right here and in my afternoon reports, to get the very early clues on when the price trends in the grains may change.
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