Monday, May 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian shares mostly weaker and European shares mostly firmer. U.S. stock indexes are pointed toward higher openings when the New York day session begins. U.S. traders and investors are upbeat to start the trading week, amid recent economic data that generally depicts strengthening U.S. business activity, and a drop in Covid-19 cases that suggests the pandemic is finally loosening its grip on the world’s largest economy.
There was also some upbeat news coming out of the Euro zone Monday. The region’s April manufacturing purchasing managers index (PMI) came in at 62.9 following a March reading of 62.5. A number above 50.0 suggests growth in the sector.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are slightly lower and trading around $63.50 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.646%.
It’s a busy day for U.S. economic data Monday, including the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, the global manufacturing PMI, construction spending and domestic auto industry sales. Federal Reserve Chairman Jerome Powell is also slated to give a speech this afternoon.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading and near last week’s contract and record high. Bulls have the strong overall near-term technical advantage. There are no early clues to suggest a market top is close at hand. 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 to bullish early today. Today, shorter-term technical resistance comes in at the record high of 4,211.00 and then at 4,230.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at last week’s low of 4,163.75 and then at 4,150.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.5
June Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with 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 Friday’s high of 13,956.75 and then at the contract and record high of 14,064.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at last week’s low of 13,818.50 and then at 13,700.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading today. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 157 24/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 156 21/32 and then at last week’s low of 156 6/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 132.03.5 and then at 132.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.26.5 and then at last week’s low of 131.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are firmer in early U.S. trading. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.2100 and then at last week’s high of 1.2161. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.2023 and then at 1.20000. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are near steady in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $64.00 and then at $65.00. Look for sell stops just below technical support at the overnight low of $62.91 and then at $62.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are higher in early U.S. pre-market trading. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place on the daily and the longer-term charts and prices at or near multi-year highs. Sellers in the grains are few, given the generally tight world supply and demand balance and the onset of the U.S. growing season for corn and soybeans. Stay tuned right here and in my afternoon reports, to get the very early clues on when the price trends in the grains may change.
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