Monday, May 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly up overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock index bulls are still on the ropes as the major indexes last week hit 12-month lows and are at or flirting with bear market territory—meaning prices 20% down from their recent highs.
Trader and investor risk appetite up-ticked a bit to start the trading week on reports the U.S. may consider lifting some trade tariffs on China. Meantime, China continues to struggle with rising Covid cases that have locked down parts of major cities in the world’s second-largest economy.
In other overnight news, European Central Bank President Christine Lagarde said the ECB will likely raise interest rates at its July meeting.
U.S. President Joe Biden is on an Asian tour and Monday laid out a new economic cooperation platform called the Indo-Pacific Economic Framework.
The key outside markets today see Nymex crude oil futures prices higher and trading around $111.50 a barrel. Meantime, the U.S. dollar index is sharply down and hit a nearly four-week low in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.815%.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index. The data pace picks up rapidly Tuesday.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading, on short covering as prices are not far above last Friday’s 12-month low. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,955.00 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,910.25 and then at 3,855.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading, on short covering after hitting Friday’s 12-month low. Prices are in a six-week-old downtrend 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 bullish early today. Shorter-term technical resistance is seen at Friday’s high of 12,096.75 and then at 12,400.00. On the downside, shorter-term support is seen at the overnight low of 11,963.25 and then at 11,689.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 141 22/32 and then at the May high of 142 2/32. Shorter-term support lies at Friday’s low of 140 7/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Bears are in overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 120.03.5 and then at the May high of 120.10.0. Shorter-term technical support lies at the overnight low of 119.21.5 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are sharply higher in early U.S. trading. Bears still have the firm 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish today. The Euro currency finds shorter-term technical resistance at 1.0700 and then at 1.0750. Shorter-term support is seen at 1.0600 and then at the overnight low of 1.0569. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. 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 bullish early today. Look for buy stops to reside just above technical resistance at the May high of $113.20 and then at $115.00. Look for sell stops just below technical support at the overnight low of $109.51 and then at $108.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage. Weather patterns in the U.S. Midwest will be main market drivers for the next few months. On tap today is the weekly USDA export inspections report.
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