Stock markets rebound Tuesday

Tuesday, May 18–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Global investor and trader risk appetite has improved Tuesday. For the moment at least, the marketplace is not paying much attention to the escalating fighting between Israel and Hamas that is the fiercest since 2014.

In overnight news, first-quarter Euro zone gross domestic product fell 0.6% from the fourth quarter of last year and was down 1.8%, year-on-year. Those numbers were in line with market expectations.

The key outside markets today see the U.S. dollar index lower and hitting a nearly three-month low. Meantime, Nymex crude oil prices are higher, hit a two-month high overnight, and are trading around $66.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.647%. The German 10-year bund yield is trading at -0.109% and the U.K. 10-year gilt yield is 0.881%.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, new residential construction and the ISM semiannual business economic forecast.

–Jim

U.S. STOCK INDEXES

June S&P 500 e-mini futures: Prices are firmer 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 still suggest a market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with 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 the overnight high of 4,179.50 and then at 4,200.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 4,136.50 and then at 4,105.25. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5

June Nasdaq index futures: Prices are higher 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 bullish early today. Shorter-term technical resistance is seen at Monday’s high of 13,448.50 and then at 13,500.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 13,290.00 and then at Monday’s low of 13,182.75. 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 weaker in early U.S. trading today. Bears still 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 neutral early today. Shorter-term technical resistance is seen at Monday’s high of 157 14/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at 156 3/32 and then at the May low of 155 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

June U.S. T-Notes: Prices are slightly 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 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 resistance lies at Monday’s high of 132.21.5 and then at 132.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.07.5 and then at 132.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The June Euro currency futures are solidly higher and hit a nearly three-month high 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2230 and then at the February high of 1.2271. Buy stops likely reside just above those levels. Shorter-term support is seen at the overnight low of 1.2159 and then at Monday’s low of 1.2133. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 7.0

NYMEX CRUDE OIL

June Nymex crude oil prices are firmer and hit a two-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 March high of $67.29 and then at $68.00. Look for sell stops just below technical support at $66.00 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 6.5

GRAINS

U.S. grain futures are solidly higher in early U.S. pre-market trading, on rebounds from recent selling pressure. 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. 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