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