Tuesday, May 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
Two important meetings have the attention of the world marketplace this week: The Federal Reserve’s Open Market Committee (FOMC) meeting begins Tuesday morning and ends Wednesday afternoon with a statement. Also, a U.S. high-level trade delegation will travel to China later this week to try to avert a trade war between the world’s two largest economies. President Trump late Monday decided to delay by one month implementing on the European Union proposed tariffs on aluminum and steel. Tariffs are in effect for Russia and China.
On Friday is the U.S. employment report from the Labor Department—arguably the most important U.S. data point of the month.
The key “outside markets” on Tuesday morning see the U.S. dollar index trading higher and at a nearly four-month high.
Meantime, Nymex crude oil prices are weaker and trading just below $68.00 a barrel. The U.S. oil rig count hit a three-year high last week and the IEA on Monday reported that U.S. crude oil production topped 10 million barrels a day in February—a record. These factors will limit buying interest in oil this week.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, and domestic auto industry sales.
–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 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 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 Monday’s high of 2,682.25 and then at last week’s high of 2,688.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,625.00 and then at last week’s low of 2,611.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index December futures: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average even with the 9-day. The 9-day average is even with 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 6,718.00 and then at last week’s high of 6,772.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,550.00 and then at 6,500.00. 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 weaker in early U.S. trading. Bears have the solid 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 bullish early today. Shorter-term technical resistance is seen at Monday’s high of 143 28/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 142 30/32 and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker 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 bullish early today. Shorter-term resistance lies at Monday’s high of 119.21.0 and then at 119.26.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 119.12.0 and then at 119.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is higher and hit a nearly four-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 92.250 and then at 92.500. Shorter-term support is seen at the overnight low of 91.595 and then at Monday’s low of 91.280. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
June Nymex crude oil prices are lower in early U.S. trading. Bulls are still in firm near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $68.90 and then at Monday’s high of $69.34. Look for sell stops just below technical support at Monday’s low of $67.17 and then at $66.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were mixed to weaker overnight. Farmers are in their fields at full speed, planting corn and preparing for soybean planting. That’s bearish but the grain market bulls still have some technical momentum on their side. Also, speculative traders are taking more interest in the long side of the grains, including the big “funds.”