Tuesday, May 29–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were lower overnight. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
Geopolitical risk is squarely on the front burner of the marketplace early this week. The Italian president on Sunday blocked an anti-establishment government from forming. There is also an upcoming election in Spain, where the right-wing candidate is expected to do well. All of this is putting strong downside pressure on the Euro currency, which fell to a seven-month low against the U.S. dollar overnight.
The U.S.-North Korea nuclear summit may be back on, as the U.S. has sent a team of negotiators and planners to Singapore to set up the summit meeting between U.S. President Trump and North Korean President Kim Jong Un. However, given recent North Korean actions, the summit could quickly be off again.
U.S. Treasuries are seeing some safe-haven demand today, on geopolitics. However, gold prices are not seeing much of a safe-haven bid, so far.
The key “outside markets” today find Nymex crude oil prices lower, hitting a six-week low and trading around $67.00 a barrel. Last Friday’s bearish weekly low close and the recent steep downdraft are technical clues the market has put in at least a near-term top. U.S. oil production is at an all-time high and Russia and Saudi Arabia have pledged to open their oil spigots some more.
Meantime, the U.S. dollar index is solidly higher and hit a 10.5-month high, as the greenback continues its surge higher.
U.S. economic data due for release Tuesday includes the S&P/Case-Shiller home price index, the consumer confidence index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower and hit a two-week low in early U.S. trading. The bulls still have the slight overall near-term technical advantage but trading has turned choppy and sideways recently. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 2,715.00 and then at the overnight high of 2,731.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,690.25 and then at 2,675.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index December futures: Prices are lower in early U.S. trading. 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 6,950.00 and then at 6,975.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen the overnight low of 6,922.75 and then at 6,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are solidly higher and hit a six-week high in early U.S. trading. Bulls have upside momentum amid safe-haven demand for U.S. securities. 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 with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 145 16/32 and then at the overnight high of 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at 144 16/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
June U.S. T-Notes: Prices are solidly higher and hit a six-week high. 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 bullish early today. Shorter-term resistance lies at the overnight high of 121.00.0 and then at 121.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.10.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
U.S. DOLLAR INDEX
The June U.S. dollar index is solidly higher and hit a 10.5-month high in early U.S. trading today. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 94.975 and then at week’s high of 95.250. Shorter-term support is seen at 94.500 and then at the overnight low of 94.235. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
July Nymex crude oil prices are lower and hit a six-week low overnight. The bulls have lost their near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $67.55 and then at $68.90. Look for sell stops just below technical support at $66.00 and then at the overnight low of $65.80. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures were higher overnight. Bulls have good upside momentum, to suggest more upside coming. Psychologically, the grain markets appear to have seen a change: from one of commercial end-users of the grains comfortable holding little supplies on hand amid a world supply-and-demand situation that saw plentiful grain supplies, to one now of end-users becoming a bit more worried about supplies and now wanting to stock up more grain.