Thursday, May 10–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
The marketplace is not seeing a significant reaction from renewed Syria-Israeli military action, as both sides conducted air strikes against the other the past 24 hours. Still, it appears the Middle East has once again become a geopolitical flashpoint for the markets. That’s bullish for crude oil and safe-haven gold and silver.
Traders are awaiting the conclusion of the Bank of England’s regular monetary policy meeting today.
The U.S. economic highlight today will be the consumer price index for April, which is expected to come in up 0.3% from March, and be up 2.5% at an annual rate.
The “outside markets” today find Nymex crude oil prices higher, at a new 3.5-year high, and trading near $72.00 a barrel. The U.S. dollar index is slightly lower on profit taking after hitting a 4.5-month high Wednesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings, the consumer price index, the monthly Treasury budget statement and monthly chain store sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer and hit a three-week high in early U.S. trading. The bulls have gained the slight overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,718.50 and then at 2,735.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 2,666.50 and then at this week’s low of 2,652.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index December futures: Prices are firmer and hit a six-week high 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 below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 6,950.00 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,850.00 and then at 6,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer on short covering in early U.S. trading. Bears have the firm 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. 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 143 even and then at Wednesday’s high of 143 9/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 142 15/32 and then at 142 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer on short covering in early U.S. trading today. 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 neutral early today. Shorter-term resistance lies at Wednesday’s high of 119.15.0 and then at 119.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 119.06.0 and then at the contract low of 118.31.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is lower today on profit taking after hitting a 4.5-month high on Wednesday. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.030 and then at this week’s high of 93.260. Shorter-term support is seen at this week’s low of 92.290 and then at 92.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are higher and hit another 3.5-year high overnight. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $71.89 and then at $72.00. Look for sell stops just below technical support at $71.00 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were firmer overnight. The bulls have faded recently, amid good planting progress in the U.S. Corn Belt. Traders are awaiting Thursday morning’s monthly USDA supply and demand report, which is expected to be bullish for corn and soybeans and bearish for wheat. Weather in the Corn Belt will now be a major fundamental factor for the next three months.