Wednesday, May 17–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Trader and investor risk appetite is a bit keener at mid-week. The U.S. debt-limit extension talks held Tuesday afternoon were upbeat. President Joe Biden and House Speaker Kevin McCarthy named top emissaries to negotiate a deal to avert an unprecedented national default. Biden cut short an upcoming overseas trip in hopes of closing an agreement before a June 1 deadline.
The marketplace continues to monitor comments made this week by Federal Reserve officials. While their opinions have been mixed regarding continuing to tighten U.S. monetary policy or to pause, traders and investors generally view their collective remarks as still leaning slightly hawkish.
In overnight news, the Euro zone April consumer price index came in at up 7.0%, year-on-year, which was right in line with market expectations.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are firmer and trading around $71.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.528%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. 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 even with 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 this week’s high of 4,156.25 and then at last week’s high of 4,173.25. Support for active traders is seen at last week’s low of 4,111.75 and then at the May low of 4,062.25. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly up in early U.S. trading and not far below Tuesday’s eight-month high. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 13,554.50 and then at 13,700.00. On the downside, shorter-term support is seen at this week’s low of 13,350.00 and then at last week’s low of 13,202.75. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading. 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 technical resistance is seen at this week’s high of 130 24/32 and then at 131 even. Shorter-term support lies at this week’s low of 128 22/32 and then at 128 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly higher in early U.S. trading. 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 to bearish early today. Shorter-term resistance lies at this week’s high of 115.18.5 and then at 116.00.0. Shorter-term technical support is seen at this week’s low of 114.23.0 and then at 114.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are lower and hit a six-week low in early U.S. trading. Bulls are fading. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0926 and then at 1.1000. Shorter-term support is seen at 1.0800 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly up in early U.S. trading. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day. The 9-day is below 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 this week’s high of $71.79 and then at $73.00. Look for sell stops just below technical support at this week’s low of $69.41 and then at $68.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed overnight. Bulls are fading at mid-week. The near-term technical postures for soybeans, meal, bean oil, SRW wheat and corn futures are all bearish. HRW wheat is solidly bullish. Seasonal price studies at present favor the grain market bears. Weather in the U.S. Midwest remains generally bearish for corn and soybeans and neutral for wheat.
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