Wednesday, May 18–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, on corrective pullbacks following gains on Tuesday. Traders and investors remain tentative at mid-week on new reports that Covid continues to spread in China, after reports earlier this week that said China’s government could ease up on its lockdowns.
Federal Reserve Chairman Jerome Powell on Tuesday afternoon reiterated the central bank’s main goal is to tamp down inflation, even if it means pushing up the unemployment rate. He said the Fed “has the tools and resolve” to cool inflation. The marketplace read his latest comments as maybe not surprising but certainly hawkish.
In overnight news, U.K. inflation hit a 40-year high as consumer prices in April rose 9%, year-on-year. Euro zone inflation was also reported Wednesday and its consumer price index for April was up 7.4% on an annual basis.
The key outside markets today see Nymex crude oil futures prices firmer and trading around $114.00 a barrel. Meantime, the U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.975%.
U.S. economic data due for release day 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 weaker in early U.S. trading. Prices are in a six-week-old downtrend on the daily bar chart and bears have the firm near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,100.00 and then at 4,150.00. Support for active traders is seen at 4,030.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Prices are trending down on the daily bar chart and bears have the solid technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 12,594.00 and then at 12,700.00. On the downside, shorter-term support is seen at this week’s low of 12,190.25 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Bears are in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 technical resistance is seen at the overnight high of 138 28/32 and then at Tuesday’s high of 139 26/32. Shorter-term support lies at 138 even and then at 137 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker in early U.S. trading. Bears are in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 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 119.00.0 and then at 119.10.0. Shorter-term technical support lies at 118.16.0 and then at 118.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 neutral today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0575 and then at 1.0600. Shorter-term support is seen at 1.0500 and then at Tuesday’s low of 1.0439. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. 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 this week’s high of $115.56 and then at $117.00. Look for sell stops just below technical support at Tuesday’s low of $111.75 and then at $110.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, on corrective pullbacks from early-week gains. Grain market bulls still have the firm overall near-term chart advantage. Wheat had taken over leadership in the bullish camp but is now seeing heavy profit-taking pressure at mid-week after prices soared higher earlier this week.
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