Wednesday, May 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on corrective rebounds from recent strong selling pressure. The S&P 500 and Nasdaq futures markets hit 12-month lows Tuesday and are in solid near-term price downtrends, suggesting the path of least resistance for the indexes will remain sideways to lower.
The U.S. data point of the week comes with today’s consumer price index report for April, which is expected to come in hot at up 8.1%, year-on-year. In March, the PPI rose 8.5% from a year earlier. Inflation remains a main concern for traders and investors, along with the ongoing Russia-Ukraine war and Covid lockdowns in China.
The key outside markets today see Nymex crude oil futures prices solidly up and trading around $103.25 a barrel. Meantime, the U.S. dollar index is lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.938%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher on more short covering after hitting a 12-month low on Tuesday. Prices are still 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,099.00 and then at 4,153.25. Support for active traders is seen at the overnight low of 3,986.50 and then at this week’s low of 3,953.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher on more short covering after hitting a 12-month low on Tuesday. 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 neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 12,637.25 and then at 12,800.00. On the downside, shorter-term support is seen at the overnight low of 12,320.50 and then at this week’s low of 12,102.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading on more short covering. Bears are still in solid technical control. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 140 even and then at 141 even. Shorter-term support lies at the overnight low of 138 12/32 even and then at Tuesday’s low of 137 4/32. 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 near-term technical control. 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 bullish early today. Shorter-term resistance lies at 119.16.0 and then at 119.24.0. Shorter-term technical support lies at the overnight low of 118.24.5 and then at 118.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are slightly higher in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0658 and then at 1.0700. Shorter-term support is seen at the contract low of 1.0490 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Tuesday’s high of $104.16 and then at $105.00. Look for sell stops just below technical support at $100.00 and then at the overnight low of $98.20. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading. A rebound in crude oil prices at mid-week is supporting the grains. Weather in Corn Belt country has turned bearish. Drier and warmer weather is in the region for the coming days, which will allow for rapid corn and soybean planting progress. 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