Friday, May 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. This week has seen the marketplace appear less concerned about problematic price inflation occurring in the coming months. Today’s report on April personal consumption (consumer spending) will shed more light on present inflationary pressures. Personal spending in April is seen up 0.5% from March and up 3.5%, year-on-year.
President Biden’s budget is set to be released sometime today. It will raise federal spending to $6 trillion in the coming fiscal year and to over $8 trillion in the next fiscal year, reports say.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher, near this year’s high, and trading around $67.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.611%.
Other U.S. economic data due for release Friday includes the advance economic indicators report, the Chicago purchasing managers index, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
September S&P 500 e-mini futures: Prices are higher in early U.S. trading and not far from the recent record high. Bulls have the solid 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 bullish early today. Today, shorter-term technical resistance comes in at the contract high of 4,228.25 and then at 4,250.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Thursday’s low of 4,168.00 and then at this week’s low of 4,133.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
September Nasdaq index futures: Prices are firmer 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 and 18-day. The 9-day average is above 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 13,726.25 and then at 13,804.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at Thursday’s low of 13,610.50 and then at 13,500.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
September U.S. T-Bonds: Prices are a bit higher in early U.S. trading today. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Thursday’s high of 157 even and then at this week’s high of 157 12/32. Buy stops likely reside just above those levels. Shorter-term support lies at Thursday’s low of 155 28/32 and then at this week’s low of 155 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 132.00.0 and then at this week’s high of 132.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131.18.0 and then at 131.14.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The September Euro currency futures are lower in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2223 and then at 1.2272. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2175 and then at 1.2150. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading and near this year’s highs. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $67.45 and then at $68.00. Look for sell stops just below technical support at $66.00 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are narrowly mixed in early U.S. pre-market trading. Traders were shell-shocked by the limit-up gains in corn futures Thursday that pulled the rest of the grain markets higher, too. Key today will be if the grain futures can produce that important follow-through price strength that would likely produce technically bullish weekly high closes, which in turn would signal the grain markets this week put in near-term market bottoms. Trading Friday will be extra important. Recent rains in the U.S. Corn Belt and more in the forecast are bearish. My bias is that it’s still going to take a serious weather market scare in the Corn Belt this summer to completely revive the grain market bulls.
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