Thursday, May 13–Jim Wyckoff’s Morning Markets Report
Global stock markets were solidly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on follow-through selling after big losses Wednesday. The equities bulls are on the ropes late this week following this week’s strong selling pressure that has negated near-term price uptrends on the daily bar charts for the U.S. stock indexes, which is a technical clue the indexes have put in price tops. Traders and investors are pondering the old trading adage, “Sell in May and go away.” A hot U.S. consumer price index report on Wednesday has spooked the marketplace and further stoked notions that price inflation could get out of control down the road.
In overnight news, Bitcoin prices plunged after Elon Musk said his company, Tesla, now will not accept crypto-currency for purchases because of their mining’s effect on climate. Dogecoin has also retreated from an all-time high after Musk appeared on “Saturday Night Live” and agreed that crypto was a “hustle.”
The marketplace is still keeping an eye on the flare-up in the Middle East, as Israel and Hamas have ratcheted up their missile strikes against each other. The military action between the two is the most intense since 2014.
The key outside markets today see the U.S. dollar index up on more of a corrective bounce after prices Tuesday hit a 2.5-month low. Meantime, Nymex crude oil prices are solidly lower and trading around $64.00 a barrel. The U.S. Colonial pipeline system that had been shut down due to a cyberattack is reopening. The yield on the benchmark 10-year U.S. Treasury note is on the rise late this week and is presently fetching around 1.69%.
U.S. economic data due for release Thursday includes the weekly jobless claims report and the producer price index for April, seen up 0.3% from March.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower and hit a five-week low in early U.S. trading on more profit taking after hitting a record high Monday. Bulls still have the overall near-term technical advantage. However, the near-term price uptrend on the daily chart has been negated to suggest a market top is in place. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,077.25 and then at 4,100.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,029.25 and then at 4,000.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower and hit a six-week low in early U.S. trading. The near-term price uptrend on the daily chart has been negated to suggest a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,069.25 and then at 13,200.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 12,915.00 and then at 12,800.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady and hit a five-week low in early U.S. trading today. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 156 2/32 and then at 156 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 155 14/32 and then at 155 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are near steady in early U.S. trading and hit a two-week low overnight. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 132.03.0 and then at 132.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.24.0 and then at 131.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The June Euro currency futures are a bit weaker in early U.S. trading. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2113 and then at Wednesday’s high of 1.2160. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.2058 and then at 1.2000. 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 solidly lower in early U.S. trading. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $65.00 and then at the overnight high of $65.81. Look for sell stops just below technical support at this week’s low of $63.68 and then at the May low of $62.91. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are mixed but mostly lower in early U.S. pre-market trading. The bulls may be running out of gas. However, the markets are still in price uptrends on the daily and the longer-term charts. On tap today is the weekly USDA supply export sales report.
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