Tuesday, May 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The U.S. stock indexes rallied sharply Monday on positive early results for a Covid-19 vaccine. Many in the marketplace are speculating it’s going to take a proven vaccine to bring the global economy completely back to life and get humans back to mostly normal day-to-day matters. Still, early this week finds trader and investor risk appetite more robust, also due in part to a sharp rally in crude oil prices recently.
Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin will appear via videoconference before the Senate Banking Committee today, discussing the U.S. emergency lending programs Congress is implementing amid the U.S. economic crisis.
The important outside markets see Nymex crude oil futures higher early today and hitting a two-month high overnight, trading around $32.25 a barrel in the June contract, which expires today. Many were predicting the June futures contract would expire the way the May contract did—in negative territory. The U.S. dollar index is lower again early today. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.7%.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading after hitting a 2.5-month high overnight. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 2,976.25 and then at 3,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 2,900.00 and then at Monday’s low of 2,850.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly lower in early U.S. trading but hit a 2.5-month high overnight. A price uptrend is firmly 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 9,417.25 and then at 9,500.00. On the downside, shorter-term support is seen at 9,200.00 and then at the overnight low of 9,110.25. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading. Bulls still have the overall technical advantage but have faded a bit early this week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 179 1/32 even and then at 180 even. Shorter-term support lies at the May low of 178 1/32 and then at 177 16/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 138.29.0 and then at 139.00.0. Shorter-term technical support lies at Monday’s low of 138.18.0 and then at the May low of 138.08.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is lower in early U.S. trading. Bulls are fading early this week but still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 99.755 and then at 100.000. Shorter-term support is seen at 99.00 and then at the May low of 98.765. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher and hit a two-month high in early U.S. trading. Bulls are enjoying a price uptrend on the daily bar chart. 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $33.44 and then at $34.00. Look for sell stops just below technical support at $31.00 and then at $30.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are mixed to firmer in early U.S. pre-market trading. Not much new. The U.S. corn and soybean crops are being planted at a rapid pace amid generally good weather. Grain bears remain in overall technical control, even though market bottoms appear to be in place. The grain market bulls need a major Covid-19 vaccine breakthrough or a serious weather market scare somewhere in a major producing region of the world.
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