Monday, May 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The S&P 500 stock index last week had its worse week in 11 years. The index is flirting with being in a bear market that is defined by being down 20% from the recent high. The Russia-Ukraine war, Covid lockdowns in China and inflation fears are hitting the equities hard.
In overnight news, China reported its April industrial output down 2.9%, year on year, which was lower than the gain of 1.0% that was expected by the trade.
Meantime, the European Union cut the Euro zone 2022 economic growth rate forecast to 2.7% from its 4.0% earlier estimate.
McDonald’s announced it is pulling its businesses out of Russia due to Russia’s aggression against Ukraine.
The key outside markets today see Nymex crude oil futures prices a bit lower and trading around $110.00 a barrel. Meantime, the U.S. dollar index is weaker in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.921%.
U.S. economic data due for release Monday includes the Empire State manufacturing survey, and Treasury international capital data.
–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 solid near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,042.00 and then at 4,100.00. Support for active traders is seen at 3,950.00 and then at last Friday’s low of 3,915.50. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are weaker 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 bearish early today. The 4-day moving average is below 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 12,500.00 and then at 12,600.00. On the downside, shorter-term support is seen at the overnight low of 12,230.25 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 firmer in early U.S. trading on short covering. Bears are still 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 139 28/32 and then at 140 16/32. Shorter-term support lies at the overnight low of 138 25/32 and then at 138 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading. Bears are still 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 above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 119.18.0 and then at Friday’s high of 119.23.5. Shorter-term technical support lies at 119.00.0 and then at 118.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are firmer on short covering after hitting a contract low Friday. 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 the 1.0500 and then at 1.0550. Shorter-term support is seen at the contract low of 1.0361 and then at 1.0300. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are weaker in early U.S. trading after hitting a seven-week high overnight. 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $111.71 and then at $113.51. Look for sell stops just below technical support at the overnight low of $108.11 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures prices were solidly higher in early U.S. pre-market trading. Grain market bulls have the firm overall near-term chart advantage. Wheat has now taken over leadership in the bullish camp and sees HRW prices at a 14-year high. On tap today is the weekly USDA export inspections report and weekly crop progress reports.
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