Tuesday, May 17–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The marketplace is more upbeat Tuesday on reports China will start to ease its lockdowns in major cities, including Hong Kong and Shanghai.
The marketplace will be watching a scheduled Wall Street Journal interview with Fed Chairman Jerome Powell this afternoon. Traders and investors will be keen to see if Powell remarks on timing aspects of Fed monetary policy and/or inflation, as well as the prospect of the U.S. economy entering a recession.
In overnight news, the Eurozone economy grew by 0.3% in the first quarter and GDP was up 5.1%, year-on-year. Those numbers were slightly better than expected.
The key outside markets today see Nymex crude oil futures prices firmer, at a nine-week high and trading around $115.00 a barrel. Meantime, the U.S. dollar index is lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.915%.
A busy U.S. economic data release day Tuesday includes the weekly Johnson redbook and chain store retail reports, retail sales, industrial production and capacity utilization, the NAHB housing market index, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading. Prices are still in a six-week-old downtrend on the daily bar chart and bears have the firm 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 bullish early today. Today, shorter-term technical resistance comes in at 4,100.00 and then at 4,150.00. Support for active traders is seen at 4,050.00 and then at the overnight low of 4,000.50. Wyckoff’s Intra-day Market Rating: 6.5
June Nasdaq index futures: Prices are solidly higher in early U.S. trading. Prices are still 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 bullish early today. Shorter-term technical resistance is seen at 12,600.00 and then at 12,750.00. On the downside, shorter-term support is seen at the overnight low of 12,234.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in solid overall near-term technical control. 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 Monday’s high of 140 13/32 and then at the May high of 141 3/32. Shorter-term support lies at Monday’s low of 138 25/32 and then at 138 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Bears are in solid overall near-term technical control. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Monday’s high of 119.27.5 and then at the May high of 120.00.5. Shorter-term technical support lies at Monday’s low of 119.01.5 and then at 118.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are solidly higher on more short covering. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish today. The Euro currency finds shorter-term technical resistance 1.0600 and then at 1.0658. Shorter-term support is seen at overnight low of 1.0439 and then at the contract low of 1.0361. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher and hit a nine-week high 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $115.43 and then at $117.00. Look for sell stops just below technical support at $112.00 and then at $110.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, on corrective pullbacks from Monday’s solid gains. Grain market bulls still have the firm overall near-term chart advantage. Wheat has taken over leadership in the bullish camp and sees HRW prices at a 14-year high this week.
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