Monday, May 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.
The key outside markets today see the U.S. dollar index trading firmer. Prices are hovering near last week’s four-month high. Meantime, crude oil prices are higher and hit a 3.5-year high overnight. Brent crude is approaching $76.00 a barrel and Nymex crude oil futures are above $70.00 a barrel. There is growing concern the U.S. will not renew a deal struck with Iran in 2015 to curtail its nuclear arms development. The agreement expires Saturday. If the U.S. pulls out of the agreement, sanctions against Iran will be reapplied, including ostensibly sharply curbing Iranian oil exports.
U.S. economic data due for release Monday is light and includes the employment trends index and consumer credit.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. The bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. 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 bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 2,682.25 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,650.00 and then at 2,635.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index December futures: Prices are higher and hit a two-week high in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 6,833.00 and then at 6,867.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,772.25 and then at 6,750.00. 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 weaker in early U.S. trading. 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 144 even and then at last week’s high of 144 8/32. Buy stops likely reside just above those levels. Shorter-term support lies at Friday’s low of 143 5/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly lower in early U.S. trading today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 119.23.0 and then at 118.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.14.0 and then at 119.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is higher in early U.S. trading today and near last week’s four-month high. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 92.755 and then at 93.000. Shorter-term support is seen at the overnight low of 92.290 and then at 92.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher and hit a 3.5-year high in early U.S. trading. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $70.69 and then at $71.00. Look for sell stops just below technical support at $70.00 and then at the overnight low of $69.71. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
Grain futures were lower overnight, on more profit taking from recent gains. Good planting progress in the U.S. Corn Belt is a bearish element. Weather in the Corn Belt will now be a major fundamental factor for the next three months.