Friday, May 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower in overnight trading. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins. There is increased risk aversion in the marketplace late this week, as the U.S. and China appear on a collision course that could set off the next “cold war” between the two largest economies in the world. President Trump sometime Friday is expected to hold a press conference to address China’s actions to tighten its grip on Hong Kong. Trump will also likely comment on China’s involvement in suppressing early Covid-19 infection rates in China. Still, at present traders and investors have no idea what Trump will say or do.
In overnight news, the Euro zone consumer price index for May rose 0.1% compared to up 0.3% in April. The May reading was in line with market expectations.
The important outside markets see the U.S. dollar index lower early today and hitting a 2.5-month low. Nymex crude oil prices are lower and trading around $32.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.7%.
U.S. economic data due for release Friday includes personal income and outlays, the advance economic indicators report, the ISM Chicago business survey, and the University of Michigan consumer sentiment report. Fed Chairman Jerome Powell also speaks at an event today.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are weaker in early U.S. trading, on a mild pullback from recent gains. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 3,055.75 and then at 3,075.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 3,000.00 and then at 2,975.00. Wyckoff’s Intra-day Market Rating: 4.5
September Nasdaq index futures: Prices are weaker in early U.S. trading. A price uptrend is still firmly in place on the daily chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 9,500 and then at this week’s high of 9,587.50. On the downside, shorter-term support is seen at 9,314.00 and then at this week’s low of 9,167.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the overall technical advantage but trading has been sideways and choppy at higher levels for weeks. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Wednesday’s high of 178 10/32 and then at this week’s high of 178 29/32. Shorter-term support lies at the overnight low of 177 10/32 and then at this week’s low of 176 19/32. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage but trading has been choppy and sideways at higher levels for weeks. 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 this week’s high of 139.01.0 and then at 139.08.0. Shorter-term technical support lies at the overnight low of 138.24.0 and then at this week’s low of 138.13.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is lower and hit a 2.5-month low in early U.S. trading. Bulls have faded badly this week. The shorter-term moving averages for the dollar index 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 dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 98.560 and then at 99.000. Shorter-term support is seen at 98.000 and then at 97.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are lower in early U.S. trading. Bulls are fading this week but still see a price uptrend in place on the daily bar chart, but just barely. The shorter-term moving averages are still 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $33.77 and then at this week’s high of $34.81. Look for sell stops just below technical support at this week’s low of $31.14 and then at $30.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are mixed in early U.S. pre-market trading. Focus today will be on the weekly USDA export sales report. Deteriorating U.S.-China relations has put a cap on grain price rallies. While market bottoms are likely in place for the grains, don’t look for significant price uptrends to develop anytime soon. More likely is a sideways grind until a weather market in the U.S. Midwest develops this summer. But so far very good early-season planting and growing weather is seen for the U.S. corn, soybean and wheat crops, which is a major bearish fundamental.
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