Friday, May 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The equities bulls are still on the ropes following this week’s selling pressure that negated near-term price uptrends on the daily bar charts for the U.S. stock indexes, which is a technical clue the indexes have put in price tops. Inflation worries are still on the minds of many traders and investors and that makes them more tentative about holding paper assets. Ironically, Thursday’s global trading saw many raw commodity markets sell off, some sharply, including grains, crude oil, iron ore, copper and others.
The U.S. economic data point of the day is the retail sales report for April, seen up 0.8% after the mammoth gain if 9.8% in the March report.
The marketplace is still keeping an eye on the intensifying military confrontation in the Middle East, as Israel and Hamas are exchanging heavy artillery and rocket barrages.
The key outside markets today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are firmer and trading around $64.40 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.654%.
Other U.S. economic data due for release Friday includes import and export prices, industrial production and capacity utilization, manufacturing and trade inventories, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading on a continued rebound from this week’s sell off. Bulls have the overall near-term technical advantage. However, the near-term price uptrend on the daily chart has been at least temporarily 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at 4,150.50 and then at 4,175.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,105.25 and then at 4,075.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading on a bounce from this week’s selling pressure. The near-term price uptrend on the daily chart has been negated 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 neutral to bullish early today. Shorter-term technical resistance is seen at 13,300.00 and then at 13,75.75. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 13,071.00 and then at 13,000.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading today, on short covering. Bears still have the firm 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 neutral to bullish early today. Shorter-term technical resistance is seen at 157 even and then at 157 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 156 3/32 and then at this week’s low of 155 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher in early U.S. trading on short covering. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 132.15.5 and then at 132.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.06.0 and then at 132.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2136 and then at Wednesday’s high of 1.2160. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2100 and then at this week’s low of 1.2058. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below 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 $65.00 and then at Thursday’s high of $65.81. Look for sell stops just below technical support at this week’s low of $63.09 and then at the May low of $62.91. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are solidly higher in early U.S. pre-market trading, on corrective bounces after big losses Thursday. The bulls may be running out of gas. However, the corn and soybean markets are still in solid 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. And if wheat has put in a market top, I can’t see corn and soybeans continuing to make new highs. Thus, keep an extra close eye on the wheat market. It could be the downside leader for the near term.
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