Tuesday, May 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight, with Europe mostly weaker and Asia mostly firmer. U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins.
There is growing concern the U.S. will not renew a deal struck with Iran in 2015 to curtail its nuclear arms development. President Trump says he will announce his decision on the matter Tuesday afternoon. The Iran nuke agreement expires Saturday. If the U.S. pulls out of the agreement, sanctions against Iran will be reapplied, including ostensibly sharply curbing Iranian oil exports.
In overnight news, China’s exports increased 12.9% in April, year-on-year, while its imports were up 21.5%. Both numbers beat market expectations. China’s top economic advisor will travel to the U.S. next week to resume trade-dispute negotiations between the world’s two largest economies.
The “outside markets” today finds crude oil prices lower on profit taking after hitting a 3.5-year high above $70.00 on Monday. Today’s announcement from Trump is likely to move the oil markets.
Meantime, the U.S. dollar index is higher and hit a 4.5-month high overnight. The index is in a steep price uptrend and the greenback bulls have technical power to suggest more upside in the near term.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, and the IDB/TIPP economic optimism index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading. The bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. 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 early today. Today, shorter-term technical resistance comes in at Monday’s high of 2,681.50 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,650.00 and then at 2,635.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index December futures: Prices are lower in early U.S. trading. 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 below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 6,851.00 and then at 6,867.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 6,772.25 and then at 6,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bears have the firm 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. 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 144 even and then at last week’s high of 144 8/32. Buy stops likely reside just above those levels. Shorter-term support lies at last Friday’s low of 143 5/32 and then at 143 even. 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 today. 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 neutral to bullish early today. Shorter-term resistance lies at Monday’s and the overnight high of 119.23.0 and then at 118.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.14.0 and then at 119.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is higher and hit a 4.5-month high in early U.S. trading today. The shorter-term moving averages for the dollar index 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 93.000 and then at 93.25. Shorter-term support is seen at the overnight low of 92.505 and then at Monday’s low of 92.290. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are lower on profit taking after hitting a 3.5-year high Monday. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $70.27 and then at Monday’s high of $70.84. Look for sell stops just below technical support at $69.50 and then at $69.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were mixed overnight. The bulls are fading early this week. Good planting progress in the U.S. Corn Belt is a bearish element. Traders are awaiting Thursday morning’s monthly USDA supply and demand report. Weather in the Corn Belt will now be a major fundamental factor for the next three months.