Tuesday, May 31–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The feature in the marketplace to start the U.S. trading week is sharply higher crude oil prices that are trading above $118 a barrel in Nymex futures, on news the European Union has agreed to ban the import of most Russian oil by the end of this year.
China got some upbeat economic news early this week as its official purchasing managers index for May rose to 49.6 from 47.4 in April. Still, a reading below 50.0 suggests contraction in the sectors. Also, reports say China’s Covid lockdowns are starting to be eased in some major cities.
Meantime, the Eurozone saw some more bad inflation numbers Tuesday, as its May consumer price index came in at up 8.1%, year-on-year, compared to a reading of up 7.4% in April.
In other news, U.S. President Joe Biden has summoned Fed Chair Jerome Powell to the White House for a meeting Tuesday to discuss problematic price inflation that is gripping the U.S. at present.
The other key outside markets today see the U.S. dollar index is solidly up in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.802%.
U.S. economic data due for release Tuesday includes the U.S. quarterly house price index, the monthly house price index, the S&P Core-Logic home price indexes, the ISM Chicago business survey, the consumer confidence index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading after hitting a three-week high overnight. A two-month-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Last Friday’s bullish weekly high close is also a clue that a near-term market bottom is in place. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below 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 4,202.25 and then at 4,250.00. Support for active traders is seen at 4,100.00 and then at last Friday’s low of 4,041.25. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly higher in early U.S. trading and hit a three-week high overnight. Last Friday’s bullish weekly high close is one clue that a near-term market bottom is in place. Also, a two-month-old downtrend on the daily bar chart has been negated. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 12,883.00 and then at 13,000.00. On the downside, shorter-term support is seen at 12,500.00 and then at 12,350.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 142 1/32 and then at the May high of 142 22/32. Shorter-term support lies at the overnight low of 140 8/32 and then at 140 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Bears are still in overall near-term technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 120.18.5 and then at the May high of 120.31.0. Shorter-term technical support lies at the overnight low of 119.22.0 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are lower in early U.S. trading after hitting a five-week high overnight. Bears still have the overall near-term technical advantage but the bulls still have some momentum to suggest a market bottom is in place. 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 to bearish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0793 and then at 1.0850. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are sharply higher in early U.S. trading and hit a three-month high overnight. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $119.43 and then at $120.00. Look for sell stops just below technical support at $117.00 and then at the overnight low of $114.86. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures prices were mixed in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage. However, bearish weather patterns in the U.S. Midwest and Plains (rain) are keeping the bulls timid. It could well be that the grains will languish for the next month, awaiting a possible summertime weather market that can occur right after the Fourth of July holiday. On tap today is the weekly USDA export inspections report.
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