Friday, May 21–Jim Wyckoff’s Morning Markets Report
(NOTE: I will be out of the office all day Monday and there will be no A.M. or P.M. reports produced by me that day. I will be back at work Tuesday morning.—Jim)
Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock index bulls have regained momentum late this week following recent selling pressure.
In overnight news, the Euro zone May composite purchasing managers index (PMI) flash number was reported at 56.9 versus 53.8 in April. The May PMI beat market expectations. The May manufacturing PMI was 62.8 compared to 62.9 in April. A reading above 50.0 suggests growth in the sector.
Copper prices are in decline late this week, partly due to reports China may act to tamp down rising raw commodity prices.
The key outside markets today see the U.S. dollar index weaker and hitting a 4.5-month low. Meantime, Nymex crude oil prices are higher and are trading around $63.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.627%.
U.S. economic data due for release Friday includes the U.S. flash manufacturing PMI, the services PMI, and existing home sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the firm overall 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 bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,179.50 and then at 4,200.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,100.00 and then at this week’s low of 4,055.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neural 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 13,547.25 and then at 13,700.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,400.00 and then at 13,300.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading today. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 157 14/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at 156 even and then at this week’s low of 155 25/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are near steady in early U.S. trading. 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 early today. Shorter-term resistance lies at the overnight high of 132.18.5 and then at this week’s high of 132.21.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.06.0 and then at this week’s low of 131.30.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The June Euro currency futures are slightly higher 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.2251 and then at the February high of 1.2271. Buy stops likely reside just above those levels. Shorter-term support is seen at Thursday’s low of 1.2174 and then at this week’s low of 1.2133. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading after hitting a four-week low overnight. Bulls have the overall near-term technical advantage but have faded this week. 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 neutral early today. Look for buy stops to reside just above technical resistance at $64.00 and then at $65.00. Look for sell stops just below technical support at the overnight low of $61.56 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading. The “risk-off” trading attitudes much of this week are bearish for the grains. Significant chart damage has been inflicted in the grain futures this week, to suggest that near-term market tops are in place. It’s going to very likely take a serious weather market scare in the Corn Belt this summer to revive 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