Tuesday, May 24–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. stock indexes are in or near bear market territory, defined as 20% or more below their recent highs. Geopolitical and inflation worries are keeping equities market bulls squeamish.
In overnight news, China laid out a comprehensive plan to shore up its economy that has been hit hard by Covid lockdowns. The marketplace was unimpressed and showed little reaction to the plans.
Later today, Fed Chairman Jerome Powell will deliver remarks at an economic summit in Las Vegas.
The key outside markets today see Nymex crude oil futures prices slightly higher and trading around $110.50 a barrel. Meantime, the U.S. dollar index is sharply weaker and hit a four-week low in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.797%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail reports, the U.S. flash manufacturing purchasing managers index (PMI), the flash services PMI, the Richmond Fed business survey, new residential sales and the ISM semiannual economic forecast.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are in a seven-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 Monday’s high of 3,982.25 and then at 4,000.00. Support for active traders is seen at 3,900.00 and then at 3,855.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Prices are in a seven-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 neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 12,075.50 and then at 12,250.00. On the downside, shorter-term support is seen at the overnight low of 11,783.75 and then at 11,689.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 141 11/32 and then at the May high of 142 2/32. Shorter-term support lies at Monday’s low of 140 1/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher 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 bullish early today. Shorter-term resistance lies at 120.00.0 and then at the May high of 120.10.0. Shorter-term technical support lies at Monday’s low of 119.15.5 and then at 119.08.0. 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 in early U.S. trading. Bears still have the overall near-term technical advantage but the bulls have gained momentum to suggest a market bottom is in place. 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 the overnight high of 1.0745 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are a bit 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $111.96 and then at the May high of $113.20. Look for sell stops just below technical support at the overnight low of $108.61 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures prices were mixed to firmer in early U.S. pre-market trading. Grain market bulls have the overall near-term chart advantage and continue to benefit from the “inflation trade” and global grain shortage due to the Russia-Ukraine war. Weather patterns in the U.S. Midwest will also be main market drivers for the next few months.
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