FOMC minutes on deck Wednesday

Wednesday, May 22–Jim Wyckoff’s morning markets report

Asian and European stock indexes were mixed to weaker overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The U.S. stock indexes are not far below their recent record highs. However, a Barrons.com story today is headlined: The market’s fear gauge is signaling trouble.” The story said the CBOE’s VIX index, which measures implied volatility, is very low at present, suggesting low fear in the marketplace. The story said “investors get greedy” during a low VIX. “History suggests something’s has to give.”

The U.S. data point of the day Wednesday, if not the week, is the afternoon release of the minutes from the last FOMC meeting of the Federal Reserve.

Gold prices are hovering not far below this week’s record high of $2,454.20, basis June Comex futures. A Wall Street Journal report today said gold’s rally the past several months has been mostly due to buying buy central banks and especially China. The Journal said central banks of the world are starting to diversify more away from U.S. dollar-based assets that can be more easily sanctioned. The report said U.S. economic sanctions on Russia, following its invasion of Ukraine, that have helped to crimp Russia’s economy, were sort of a wake-up call for countries like China, which could also be sanctioned by the U.S. The Journal report is headlined: “Gold’s latest allure? It’s sanctions proof.”

Another WSJ story this week is titled: “China tightens minerals grip as West fails to make headway.” The story highlights China’s stockpiling of minerals like nickel, lithium and cobalt that are critical for defense and green technology. Western countries are falling behind China is securing these minerals, said the WSJ.

The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are modestly down and trading around $78.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.44%.  

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales, and the weekly DOE liquid energy stocks report.

STOCK INDEXES

June S&P 500 e-mini futures: Prices are slightly down in early U.S. trading and not far below the contract and record high. The shorter-term moving averages (4-day, 9-day and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the record high of 5,349.00 and then at 5,375.00. Support for active traders is seen at 5,300.00 and then at 5,266.25. Wyckoff’s Intra-day Market Rating: 5.0

June Nasdaq index futures: Prices are slightly up in early U.S. trading and hit a contract and record high overnight. 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 is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 18,900.00 and then at 19,000.00. On the downside, shorter-term support is seen at this week’s low of 18,633.00 and then at 18,500.00. Wyckoff’s Intra-Day Market Rating: 6.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are weaker in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 117 19/32 and then at 118 even. Shorter-term support lies at this week’s low of 116 25/32 and then at 116 even. Wyckoff’s Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are lower in early U.S. trading. 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 bearish early today. Shorter-term resistance lies at this week’s high of 109.10.5 and then at 109.18.5. Shorter-term technical support is seen at 108.24.0 and then at 108.16.0. Wyckoff’s Intra-Day Market Rating: 4.0

EURO CURRENCY

The June Euro currency futures are lower 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. 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 1.0876 and then at the May high of 1.0909. Shorter-term support is seen at 1.0800 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

July Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at Tuesday’s high of $79.72 and then at this week’s high of $80.60. Look for sell stops just below technical support at the overnight low of $77.35 and then at the May low of $76.70. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were higher overnight. Corn has seen its price uptrend stall out, which is worrisome for all the grain markets, since “Corn is King.” HRW and SRW wheat, soybeans and soybean meal are still trending higher on the daily bar charts. Weather in the U.S. grain regions is presently leaning slightly bullish.

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