Thursday, May 6–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Trader and investor appetite remains mostly upbeat late this week and that’s bullish for the equities.
In overnight news, The Bank of England raised its annual economic growth outlook for the U.K. to 7.25% from 5%. The BOE left its key interest rate unchanged at 0.1%, as expected.
China on Thursday said it is suspending its economic dialogue with Australia as relations between those two countries continue to deteriorate. It appears China is taking a harder line on the many nations that have had enough of China’s failure to play by international rules and norms.
In another sign of stronger consumer and commercial demand for goods that adds to the inflation argument, shipping giant Maersk reportedly said there are not enough ships in the world to meet container shipping demand. Maersk handles around 20% of global container traffic. The shortage of container ships and problems with the location of many containers has helped to more than triple container rates over the past year.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are lower and trading around $65.50 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.6%.
The key U.S. data point of the week and arguably of the month comes Friday morning with the Labor Department’s Employment Situation Report for April. Non-farm payrolls are seen up 1 million compared to a rise of 916,000 in March. The unemployment rate is seen at 5.8% versus 6.0% in March.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs and monthly chain store sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. There are no strong, early clues to suggest a market top is close at hand. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 4,185.50 and then at the record high of 4,211.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,151.50 and then at this week’s low of 4,120.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly higher in early U.S. trading. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 13,570.50 and then at Wednesday’s high of 13,665.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at the overnight low of 13,451.00 and then at this week’s low of 13,380.75. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading today. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 158 23/32 and then at the April high of 159 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at Wednesday’s low of 157 8/32 and then at this week’s low of 156 21/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the April high of 132.24.5 and then at 132.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.16.0 and then at 132.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are higher in early U.S. trading. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.2086 and then at 1.2100. Buy stops likely reside just above those levels. Shorter-term support is seen at this week’s low of 1.1995 and then at 1.1950. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker in early U.S. trading, on a corrective pullback after hitting a two-month high on Wednesday. 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $65.98 and then at this week’s high of $66.76. Look for sell stops just below technical support at the overnight low of $64.98 and then at $64.29. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures are mixed to mostly higher in early U.S. pre-market trading. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place on the daily and the longer-term charts and prices near multi-year highs. There are no early chart clues the major bull runs in the grains will end anytime soon. On tap today is the weekly USDA export sales 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