Wednesday, May 15–Jim Wyckoff’s morning markets report
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The marketplace is awaiting the U.S. consumer price index report for April, out this morning. CPI is seen up 0.4%, compared to the March report showing a rise of 0.4%. The annual CPI April reading is seen up 3.6% compared to up 3.8% in the March report. Traders and investors are thinking the CPI report might come in hot today, following the producer price index report for April that was out Tuesday morning and ran hot on inflation.
In overnight news, Comex copper futures hit a new record high of $5.1280 a pound. Tighter global supplies, better world economic growth, smelter issues in China, as well as rampant market speculation, are driving the red industrial metal’s price sharply higher. Could copper be the next cocoa? Cocoa futures last year at this time were trading around $3,000 a metric ton. In April, cocoa futures reached a record high of $12,261 a ton.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are slightly weaker and trading around $78.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.42%.
Beside the CPI report, it’s a very busy day for U.S. economic data Wednesday, also including the weekly MBA mortgage applications survey, the Empire State manufacturing survey, retail sales, real earnings, the NAHB housing market index, manufacturing and trade inventories, the weekly DOE liquid energy stocks report and Treasury international capital data. A few Federal Reserve officials also are slated to speak today.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading and hit a five-week high overnight. The shorter-term moving averages (4-day, 9-day and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 5,300.00 and then at the contract high of 5,333.50. Support for active traders is seen at this week’s low of 5,216.75 and then at 5,200.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are near steady in early U.S. trading and hit a five-week high overnight. 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 is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 18,500.00 and then at 18,600.00. On the downside, shorter-term support is seen at 18,250.00 and then at this week’s low of 18,165.50. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher and hit a five-week high 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 bullish early today. Shorter-term technical resistance is seen at 118 even and then at 119 even. Shorter-term support lies at 116 even and then at this week’s low of 115 21/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading and hit a five-week high. 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 bullish early today. Shorter-term resistance lies at 109.16.0 and then at 109.24.0. Shorter-term technical support is seen at the overnight low of 109.00.5 and then at this week’s low of 108.15.0. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are up just a bit in early U.S. trading. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0850 and then at 1.0900. Shorter-term support is seen at this week’s low of 1.0780 and then at last week’s low of 1.0740. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $79.00 and then at $80.00. Look for sell stops just below technical support at the May low of $76.89 and then at $76.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were firmer overnight. Corn, HRW and SRW wheat, soybeans and soybean meal are all trending higher on the daily bar charts. It appears the speculators are wanting to play the long sides of the grains, including the big “fund” traders.
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