Wednesday, May 30–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
It’s a very busy day for U.S. economic data Wednesday, including the weekly Goldman Sachs and Johnson Redbook retail sales reports, the weekly MBA mortgage applications survey, the ADP national employment report, the advance economic indicators report, the second estimate of first-quarter GDP, and the Federal Reserve’s beige book.
The key data point for today is likely to be the national employment report for May, which is forecast to come in at up 187,000. That report is the precursor to the Labor Department’s employment situation report on Friday morning.
There are still geopolitical concerns at mid-week. The U.S. continues to ratchet up the pressure on China, regarding trade issues.
Worries about Italy’s future in the European Union are also causing anxiety among European investors.
The key “outside markets” today find Nymex crude oil prices slightly higher on a corrective bounce after slumping to a six-week low on Tuesday. The recent steep downdraft suggests the market has put in at least a near-term top.
Meantime, the U.S. dollar index is lower on profit taking after hitting hit a 10.5-month high on Tuesday.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. The bulls still have the slight overall near-term technical advantage but trading has turned choppy and sideways recently. 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 Monday’s high of 2,731.75 and then at the May high of 2,741.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,686.75 and then at Tuesday’s low of 2,675.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index December futures: Prices are higher in early U.S. trading. 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 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 7,000.00 and then at the May high of 7,013.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen the overnight low of 6,918.50 and then at Tuesday’s low of 6,890.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are solidly lower on profit taking after hitting a six-week high overnight. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 145 even and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at 144 16/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are solidly lower but did hit a six-week high overnight. 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 resistance lies at 120.16.0 and then at 120.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.05.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is lower on a corrective pullback after hitting a 10.5-month high on Tuesday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 94.975 and then at week’s high of 95.250. Shorter-term support is seen at Tuesday’s low of 94.235 and then at 94.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are near steady in early U.S. trading as the market pauses. The bulls have lost their near-term technical advantage amid the recent steep downdraft in prices. Look for buy stops to reside just above technical resistance at Tuesday’s high of $67.55 and then at $68.00. Look for sell stops just below technical support at Tuesday’s low of $65.80 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were lower overnight, on renewed worries about a U.S.-China trade war. Some profit taking from recent gains and good growing weather in the U.S. Corn Belt at present are also pressuring the grains at mid-week.