Monday, May 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading, with Asian stock indexes mostly higher and European stocks mostly down. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. There are some new concerns about a second wave of Covid-19 sweeping countries already hit hard by the pandemic. South Korea and Singapore are seeing a resurgence in cases. This development comes as many major global economies are starting to reopen as their citizens become less patient regarding being quarantined.
There is still some unease in the marketplace regarding still-tense U.S.-China relations. The world’s two largest economies have been exchanging barbs over the origins of Covid-19, with President Trump suggesting China may have manufactured the virus in a laboratory. While U.S. and China trade officials have communicated in recent days and reaffirmed China’s commitment to purchase U.S. agricultural products, President Trump implied Friday he still may sanction China over its handling of the pandemic in its early stages. “I’m having a very hard time with China,” Trump said Friday.
China over the weekend said it would continue to stimulate its economy to support its recovery from the pandemic.
Bitcoin prices are getting hammered Monday after hitting an 11-week high last Friday.
The important outside markets today see Nymex futures lower early today and trading around $24.25 a barrel. The U.S. dollar index is higher today. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.68%.
U.S. economic reports out Monday are light and include the employment trends index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls have the near-term technical advantage amid a near-term uptrend still in place on the daily chart. The 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 moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 2,947.00 and then at the April high of 2,965.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Friday’s low of 2,879.75 and then at 2,850.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are weaker in early U.S. trading after hitting a 2.5-month high overnight. A price uptrend is in place on the daily chart. 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 early today. Shorter-term technical resistance is seen at the overnight high of 9,285.00 and then at 9,300.00. On the downside, shorter-term support is seen at Friday’s low of 9,103.25 and then at 9,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls have the overall technical advantage amid recent choppy and sideways trading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 179 25/32 and then at 180 even. Shorter-term support lies at the overnight low of 178 29/32 and then at the May low of 178 1/32. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage but trading has been sideways at higher levels for weeks. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 139.00.0 and then at 139.08.0. Shorter-term technical support lies at the overnight low of 138.23.0 and then at 138.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is higher in early U.S. trading. Bulls have the overall near-term technical advantage but trading has been sideways and choppy recently. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is even with the 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 100.455 and then at 100.975. Shorter-term support is seen at the overnight low of 99.690 and then at 99.460. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker in early U.S. trading. It strongly appears a market bottom is in place. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $25.00 and then at $26.00. Look for sell stops just below technical support at $23.00 and then at $22.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
US grain futures are mixed in early US pre-market trading. Some freeze damage occurred to the just-planted corn and soybean crops in the upper Midwest, including some damage to the wheat crop in the U.S. Just how much is unclear but probably not serious. Traders will watch today’s weekly USDA export inspections report, to see if China is stepping up to the plate to buy U.S. grains, as it has promised. Grain bears remain in overall technical control, even though market bottoms may be in place or close at hand.
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