Tuesday, May 23–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Reports said President Biden and House Speaker McCarthy on Monday afternoon had productive talks on the U.S. debt-ceiling extension. Both are scheduled to meet again this week on the matter. U.S. Treasury Secretary Janet Yellen has reiterated that the U.S. government could run out of money by June 1 if no new debt-extension deal is reached.
In overnight news, the Euro zone May composite purchasing managers index (PMI) came in at 53.3, which was slightly less than expectations. The April reading was 54.1. A number above 50.0 suggests growth in the sector.
Gold prices are down today and near the recent two-month low as the U.S. dollar index surges and as Federal Reserve officials are generally still leaning hawkish on U.S. monetary policy.
The key outside markets today see the U.S. dollar index higher and hitting a two-month high overnight. Nymex crude oil prices are slightly up and trading around $72.20 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.72%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, the U.S. flash manufacturing and services purchasing managers’ indexes, the Richmond Fed business survey, and new residential sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading. The 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 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 the May high of 4,227.25 and then at the February high of 4,244.00. Support for active traders is seen at Monday’s low of 4,186.50 and then at 4,161.25. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are slightly lower early U.S. trading after hitting an 8.5-month high overnight. 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 14,000.00 and then at 14,100.00. On the downside, shorter-term support is seen at Monday’s low of 13,794.25 and then at 13,628.25. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower and hit a nine-week low 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 126 28/32 and then at Monday’s high of 127 24/32. Shorter-term support lies at the overnight low of 126 9/32 and then at 126 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower and hit a nine-week low 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 bearish early today. Shorter-term resistance lies at the overnight high of 113.17.0 and then at Monday’s high of 113.30.0. Shorter-term technical support is seen at 113.00.0 and then at 112.24.0. 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. 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 to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0848 and then at 1.0900. Shorter-term support is seen at the May low of 1.0778 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $73.89 and then at $75.00. Look for sell stops just below technical support at Monday’s low of $70.67 and then at $70.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed overnight. Short covering was featured Monday. The near-term technical postures for soybeans, meal, bean oil, SRW wheat and corn futures are all still bearish. HRW wheat is now also bearish. 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