Thursday, May 17–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
European markets are a bit concerned about Italy and notions that country may threaten to pull out of the Euro zone bloc if the EU does not write off some of its heavy financial debt owed to the bloc. This situation will only add to the recent selling pressure against the Euro currency, and in turn be a bullish element for the surging U.S. dollar.
The U.S. trade meetings with China in Washington, D.C., begin in earnest today. Also, an agreement on an updated NAFTA trade deal between the U.S., Canada and Mexico is unlikely to be announced late this week, as the Trump administration had hoped would be the case.
The key “outside markets” today find Nymex crude oil prices higher and hitting a 3.5-year high above $72.00 a barrel. Brent crude oil futures prices pushed above $80.00 a barrel today. Meantime, the U.S. dollar index is firmer and hovering near this week’s five-month high.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and the leading economic indicators report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower on mild profit taking after hitting a seven-week high on Monday. 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 early today. Today, shorter-term technical resistance comes in at 2,731.25 and then at this week’s high of 2,741.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at this 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: 4.5
June Nasdaq index December futures: Prices are weaker in early U.S. trading. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,944.50 and then at Tuesday’s high of 6,976.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,854.25 and then at 6,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are slightly lower and hit another contract low overnight. 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 bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 141 19/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight contract low of 140 12/32 and then at 140 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are slightly firmer on short covering after hitting another contract low overnight. 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 Wednesday’s high of 118.25.5 and then at 119.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 118.14.0 and then at 118.10.0. 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 firmer and near Wednesday’s five-month high. Bulls have the firm 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 this week’s high of 93.515 and then at 93.750. Shorter-term support is seen at 93.000 and then at 92.750. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher and hit another 3.5-year high in early U.S. trading. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at $72.50 and then at $73.00. Look for sell stops just below technical support at the overnight low of $71.49 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were higher overnight. Trading has turned mixed and choppy this week. Traders will closely examine today’s weekly USDA export sales report. Good planting progress has been made in most of the U.S. Corn Belt this week. However, at least one weather firm has forecast a hotter and drier summer in the U.S. Corn Belt.