Wednesday, May 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
The U.S. data point of the day Wednesday will be the minutes from the last meeting (April 27-28) of the Federal Reserve’s Open Market Committee (FOMC), due out at 2:00 p.m. EDT. Traders and investors will be looking for further clues on the path of the U.S. economic recovery and on the inflation front.
In overnight news, Bitcoin continues to crumble at mid-week, falling below $40,000 amid reports of China cracking down on crypto currencies’ use for payments and as Elon Musk has made disparaging remarks about cryptos recently. Bitcoin is down around 40% after hitting a high above $65,000 in mid-April. Such reminds of the phrase, “easy come, easy go.”
The key outside markets today see the U.S. dollar index higher on a rebound from hitting a nearly three-month low Tuesday. Meantime, Nymex crude oil prices are lower on a corrective pullback after hitting a two-month high Tuesday, and are trading around $64.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.66%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bulls have the overall near-term technical advantage. However, a near-term price uptrend on the daily chart has been negated to suggest a market top is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,123.00 and then at 4,150.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,050.00 and then at the May low of 4,029.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. The near-term price uptrend on the daily chart was negated last week to suggest a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,223.00 and then at this week’s high of 13,448.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,000.00 and then at the May low of 12,915.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading today. Bears have the overall near-term technical advantage. 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 technical resistance is seen at the overnight high of 156 25/32 and then at 157 even. Buy stops likely reside just above those levels. Shorter-term support lies at 156 even and then at the May low of 155 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 132.14.0 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 the overnight low of 132.05.0 and then at 132.00.0. 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 on a corrective pullback after hitting a nearly three-month high overnight. 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 neutral early today. The Euro currency finds shorter-term technical resistance at the overnight 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 Tuesday’s low of 1.2159 and then at this week’s low of 1.2133. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are lower on a corrective pullback after hitting a two-month high Tuesday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above 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 the overnight high of $65.35 and then at $66.00. Look for sell stops just below technical support at $64.00 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading, amid a “risk-off” trading day Wednesday that has buyers in grains timid. The corn and soybean markets are still in price uptrends on the daily and the longer-term charts. Wheat has seen its near-term price uptrends soundly negated, to suggest that market has topped out. Trading the rest of this week will be extra important and could set the tone for price action in the grains into late June.
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