Thursday, May 24–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. Buying interest in world stock markets was squelched a bit when U.S. President Trump on Wednesday threatened more tariffs on foreign autos and auto parts.
In overnight news, the European Central Bank has warned that its countries’ bond markets would suffer if the bloc continues to show economic weakness. After an extended period of calm, concerns about the viability of the European Union have arisen again after anti-establishment politicians in Italy are preparing to form a coalition government.
A top North Korean government official said Kim Jong Un may not attend the June summit with Trump in Singapore.
The key “outside markets” today find Nymex crude oil prices weaker on profit taking after hitting a 3.5-year high on Tuesday.
Meantime, the U.S. dollar index is weaker on profit taking after hitting a six-month high on Wednesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the quarterly house price index, the monthly house price index, existing home sales and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. The bulls still have the overall near-term technical advantage but trading has turned choppy and sideways recently. 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 early today. Today, shorter-term technical resistance comes in at this week’s high of 2,741.75 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,720.25 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index December futures: Prices are slightly firmer 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 above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 7,000.00 and then at the May high of 7,013.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen the overnight low of 6,925.25 and then at 6,900.00. 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 slightly lower in early U.S. trading. 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 above 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 the overnight high of 142 22/32 and then at 143 even. Buy stops likely reside just above those levels. Shorter-term support lies at 142 even and then at 141 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker early today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 119.18.0 and then at 119.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.06.0 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is weaker in early U.S. trading today, on profit taking after hitting a six-month high on Wednesday. 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 neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 94.115 and then at last November’s high of 94.420. Shorter-term support is seen at 93.425 and then at this week’s low of 93.200. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker on more profit taking after hitting a 3.5-year high on Tuesday. Bulls are still in solid near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $72.00 and then at this week’s high of $72.90. Look for sell stops just below technical support at $71.00 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were higher overnight. Bulls have good upside momentum, to suggest new for-the-move highs in corn and wheat soon, with soybeans likely to follow. Traders will closely examine this morning’s weekly USDA export sales report.