Tuesday, May 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on corrective rebounds from recent strong selling pressure. The S&P 500 and Nasdaq futures markets hit 12-month lows overnight. The U.S. stock index bears have the solid near-term technical advantage as prices are in downtrends on the daily bar charts.
The Russia-Ukraine war, surging Covid cases that have locked down major Chinese cities, and problematic price inflation are an axis of bearish elements that will likely continue to constrain any sustained stock market recoveries.
The key outside markets today see Nymex crude oil futures prices lower and trading around $101.25 a barrel. Meantime, the U.S. dollar index is higher in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.028%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales indexes, the NFIB small business index, the IDB/TIPP economic optimism index. Several Federal Reserve officials speak today. President Biden is also slated to speak on the economy today.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher on short covering after hitting a 12-month low overnight. Prices are in a 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 Monday’s high of 4,099.00 and then at last Friday’s high of 4,153.25. Support for active traders is seen at the overnight low of 3,961.75 and then at 3,925.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher on short covering after hitting a 12-month low in overnight 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 Monday’s high of 12,637.25 and then at 12,800.00. On the downside, shorter-term support is seen at the overnight low of 12,102.25 and then at 12,000.00. 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 on short covering. Bears are still in solid technical control. 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 the overnight high of 138 18/32 and then at 139 even. Shorter-term support lies at 137 even and then at 136 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher on short covering in early U.S. trading. Bears are still in solid near-term technical control. 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 bullish early today. Shorter-term resistance lies at 119.00.0 and then at 119.10.0. Shorter-term technical support lies at the overnight low of 118.08.0 and then at 118.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The June Euro currency futures are slightly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above 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 at last week’s high of 1.0658 and then at 1.0700. Shorter-term support is seen at the contract low of 1.0490 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $104.16 and then at $105.00. Look for sell stops just below technical support at $100.00 and then at $98.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading, on short covering and bargain hunting from recent losses. Weather in Corn Belt country has turned bearish. Drier and warmer weather is now in the region for the coming days, which will allow for rapid corn and soybean planting progress. Grain market bulls still have the overall near-term chart advantage.
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