Tuesday, May 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The Nasdaq and S&P stock indexes are near their 12-month lows scored Monday. A brief “flash crash” occurred in European stock markets Monday, reportedly on an erroneous trade entered by a Citigroup in Sweden.
In other overnight news, the Euro zone producer price index for March was up 5.3% from February and up 36.8%, year-on-year. The mammoth rise was mostly due to soaring energy costs, but still, excluding energy the PPI was up 13.6%, year-on-year.
Australia’s central bank overnight raised its key interest rates by 0.25%–the first rate hike by the Reserve Bank of Australia in a decade.
The economic data point of the week in the U.S. Federal Reserve Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the Fed will raise the key U.S. interest rate by 0.5%, amid the highest inflation levels in 40 years. The monthly U.S. jobs report is also due out Friday morning.
The key outside markets today sees Nymex crude oil futures prices lower and trading around $103.75 a barrel. The U.S. dollar index is weaker in early trading. The yield on the 10-year U.S. Treasury note is presently fetching 2.967%. The 10-year yield early this week hit a 3.5-year high just above 3%. The yield on the benchmark German 10-year bond (bund) rose above 1% for the first time since 2015.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, domestic auto industry sales and manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading after hitting a 12-month low Monday. Prices are trending down on the daily bar chart. 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 early today. Today, shorter-term technical resistance comes in at 4,200.00 and then at 4,250.00. Support for active traders is seen at 4,100.00 and then at Monday’s low of 4,056.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are weaker in early U.S. trading. Prices are trending down on the daily bar chart and hit a 12-month low Monday. 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 early today. Shorter-term technical resistance is seen at the overnight high of 13,171.50 and then at 13,300.00. On the downside, shorter-term support is seen at Monday’s low of 12,709.75 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading, on 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 neutral early today. Shorter-term technical resistance is seen at Monday’s high of 140 15/32 and then at 141 even. Shorter-term support lies at Monday’s low of 139 1/32 and then at the contract low of 138 14/32. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading and hit a contract low overnight. Bears are in solid near-term 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 neutral to bearish early today. Shorter-term resistance lies at Monday’s high of 119.02.0 and then at 119.10.0. Shorter-term technical support lies at the overnight contract low of 118.04.5 and then at 118.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The June Euro currency futures are slightly up in early U.S. trading. Bears have the strong overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.0612 and then at 1.0676. Shorter-term support is seen at the contract low of 1.0490 and then at 1.0450. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $105.00 and then at $106.00. Look for sell stops just below technical support at $103.00 and then at $102.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were mixed in early U.S. pre-market trading. Bulls have the near-term chart advantage, but need some fresh bullish news because it appears they have factored all the friendly news into prices, such as major planting delays in the U.S. Corn Belt, drought in wheat country and the Russia-Ukraine war and its market implications.
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