Thursday, May 12–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 and hit 12-month lows overnight. Risk aversion remains elevated amid the Russia-Ukraine war that shows no signs of ending, Covid lockdowns in China and problematic price inflation that is gripping the globe. Traders worry the U.S. and other major economies will slip into recession in the coming months, due to the aforementioned factors.
The U.S. gets another inflation reading Thursday with the producer price index for April, which is seen coming in up 0.5% from March and compares to a rise of 1.4% in March from February.
In other news, the crypto currencies continue to get hammered amid the keener risk aversion in the marketplace. Bitcoin prices dropped to a 16-month low below $26,000 overnight.
The key outside markets today see Nymex crude oil futures prices lower and trading around $104.00 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 2.837%.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower and hit another 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,954.25 and then at 4,000.00. Support for active traders is seen at the overnight low of 3,891.50 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower and hit another 12-month low overnight. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,072.25 and then at 12,250.00. On the downside, shorter-term support is seen at the overnight low of 11,793.50 and then at 11,600.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly higher in early U.S. trading on more short covering. Bears are still in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 141 3/32 and then at 142 even. Shorter-term support lies at the overnight low of 139 14/32 and then at 139 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher on more short covering in early U.S. trading. Bears are still in solid overall near-term technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 119.30.0 and then at 120.10.0. Shorter-term technical support lies at the overnight low of 119.04.5 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are solidly lower and hit a contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish today. The Euro currency finds shorter-term technical resistance the overnight high of 1.0542 and then at this week’s high of 1.0608. Shorter-term support is seen at the overnight contract low of 1.0435 and then at 1.0400. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below 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 $106.27 and then at $107.50. Look for sell stops just below technical support at the overnight low of $102.66 and then at $101.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, on risk keener risk aversion in the general marketplace today. Traders are awaiting today’s weekly USDA export sales report and the monthly USDA supply and demand report. 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