Monday, May 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
The world marketplace has been assuaged by news the U.S. and China have agreed to set aside their trade dispute and not slap tariffs on each other’s goods, for now.
In other news, European traders and investors are still nervous regarding the potential for Italy’s anti-establishment parties to form a government, and then pulling out of the European Union. Such has caused the yield spread between German and Italian government bonds to widen substantially.
The benchmark 10-year U.S. Treasury note yield is trading around 3.07% on Monday morning, on some increasing concerns about rising inflationary pressures.
The key “outside markets” today find Nymex crude oil prices slightly higher and trading above $71.00 a barrel. Meantime, the U.S. dollar index is higher and hit a six-month high overnight.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index. Three Federal Reserve Bank presidents give speeches today that will be closely monitored.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. The bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are still 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 to bullish early today. Today, shorter-term technical resistance comes in at the May high of 2,741.25 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,700.50 and then at 2,680.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index December futures: Prices are higher in early U.S. trading. 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 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 6,947.75 and then at 6,976.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen the overnight low of 6,898.75 and then at last week’s low of 6,854.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are near steady and not far above last Friday’s contract low. Bears have the solid 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 141 16/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 140 25/32 and then at 140 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are weaker early today. Prices hit a contract low last week. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Friday’s high of 118.29.0 and then at 119.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 118.16.0 and then at the contract low of 118.10.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is higher and hit a six-month high overnight. 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 bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.965 and then at 94.250. Shorter-term support is seen at the overnight low of 93.570 and then at 93.240. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
July Nymex crude oil prices are slightly higher in early U.S. trading, and not far below last week’s 3.5-year high. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at last week’s high of $72.37 and then at $73.00. Look for sell stops just below technical support at $71.00 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were higher overnight. Bulls have gained upside momentum. Some weather firms have forecast a hotter and drier summer in the U.S. Corn Belt and that appears to be drawing in speculative trader interest into the grains.