Tuesday, May 30–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly near steady to weaker Tuesday, after the long U.S. holiday weekend. U.S. stock indexes are pointed toward slightly lower openings when the U.S. day session begins.
Gold prices are modestly lower in pre-U.S. trading after poking to a four-week high overnight. The gold bulls still have some near-term technical momentum as prices are in a fledging uptrend on the daily bar chart.
In overnight news, the Euro zone May consumer confidence index came in at -3.3 versus -3.6 in April. The May reading was in line with market expectations.
The important “outside markets” on Tuesday morning find Nymex crude oil futures prices slightly lower. The oil market bulls and bears are presently on a level overall near-term technical playing field amid the recent choppy trading. Meantime, the U.S. dollar index is slightly up. The greenback bears are still in near-term technical control as prices last week hit a six-month low and the dollar index is in a nearly three-month-old downtrend.
Traders and investors are looking forward to Friday’s U.S. employment report for May from the Labor Department. That report is arguably the most important U.S. economic data point of the month. The key non-farm payrolls number for May is forecast to come in at up around 210,000.
Several Federal Reserve Board members are scheduled to speak this week. Their comments will be parsed for clues on the timing of the next U.S. interest rate increase. The FOMC meets to discuss monetary policy in mid-June. Many Fed watchers think the June FOMC meeting will see a rate hike announced.
U.S. economic data due for release Tuesday includes personal income and outlays, the S&P/Case-Shiller home price index, the consumer confidence index, and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
S&P 500 June e-mini futures: Prices are slightly lower on mild profit taking after hitting a new contract and record high last week. The bulls still have the strong near-term technical advantage. There are no early technical clues that a market top is close at hand. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the contract high of 2,417.75 and then at 2,430.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,400.00 and then at 2,388.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index June futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a record and contract high overnight. Bulls still have the strong overall near-term technical advantage and there are no early chart clues a market top is close at hand. 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 bearish early today. Shorter-term technical resistance is seen at the overnight contract high of 5,803.50 and then at 5,825.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 5,750.00 and then at 5,730.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at the May high of 154 13/32 and then at 155 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 153 23/32 and then at 153 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading. 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 to bullish early today. Shorter-term resistance lies at 126.12.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.01.5 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly higher in early U.S. trading. Bears still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is above the 9-day. The 9-day is below 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 the overnight high of 97.700 and then at 98.000. Shorter-term support is seen at 97.000 and then at last week’s low of 96.700. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
July Nymex crude oil prices are slightly lower in early U.S. trading. The bears have some technical momentum to suggest that a near-term market top is in place. Look for buy stops to reside just above technical resistance at the overnight high of $50.28 and then at $51.00. Look for sell stops just below technical support at $49.00 and then at last week’s low of $48.18. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures markets were weaker overnight. Trading remains choppy in corn. Soybeans and wheat are firmly bearish. Weather in the U.S. Corn Belt remains mostly non-threatening, which is bearish. It’s going to take a weather scare in the U.S. Corn Belt to jumpstart any significant rallies in the grains in the coming weeks. The odds are good that a weather scare will develop in the next six weeks.