Wednesday, May 8–Jim Wyckoff’s morning markets report
In overnight news, Minneapolis Federal Reserve Bank President Neel Kashkari leaned hawkish on U.S. monetary policy by saying the central bank is likely to keep rates where they are “for an extended period of time.” Kashkari is not a voting member of the FOMC.
Sweden’s central bank, Riksbank, cut its main interest rate by 0.25% to 3.75%.
Reports said China’s central bank continues to stock up on gold reserves, adding 1.9 metric tons in April, making it 18 straight months for expanding its reserves. However, the reports said the pace of China gold buying has slowed.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are down and trading around $77.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.46%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading. The shorter-term moving averages (4-day, 9-day 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 to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 5,226.75 and then at 5,250.00. Support for active traders is seen at this week’s low of 5,155.75 and then at 5,125.00. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are near steady 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 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 18,266.25 and then at 18,400.00. On the downside, shorter-term support is seen at 18,100.00 and then at this week’s low of 17,983.75. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at this week’s high of 117 7/32 and then at 118 even. Shorter-term support lies at this week’s low of 115 23/32 and then at 115 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker in early U.S. trading. 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 neutral early today. Shorter-term resistance lies at last week’s high of 109.09.5 and then at 109.16.0. Shorter-term technical support is seen at this week’s low of 108.23.0 and then at 108.16.0. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are slightly up in early U.S. trading. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.0800 and then at last week’s high of 1.0832. Shorter-term support is seen at 1.0744 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are lower and hit a nearly two-month low 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 bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $79.17 and then at $80.00. Look for sell stops just below technical support at the overnight low of $76.89 and then at $76.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were weaker overnight, on routine corrective pullbacks from recent good gains. Corn, HRW and SRW wheat, soybeans and soybean meal are all trending higher on the daily bar charts. Seasonal price tendencies are presently favoring the grain market bulls.
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