Tuesday, May 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed overnight, with Asian stocks down and European stock indexes modestly up. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Keener investor risk appetite in the marketplace recently is driving many world stock indexes to multi-month highs. The apparent easing of U.S.-China trade tensions has traders and investors in upbeat moods early this week.
The key “outside markets” today find Nymex crude oil prices up and at a new 3.5-year high and trading above $72.00 a barrel. Brent crude is near $80.00 a barrel as the U.S. is set to once again sanction Iran, which would likely reduce that country’s oil sales on the world market.
Meantime, the U.S. dollar index is lower on a corrective pullback from recent good gains that saw prices hit a six-month high on Monday.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the Richmond Fed business survey. The U.S. data-point highlight of the week will be Wednesday afternoon’s release of the FOMC minutes from the last meeting.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. The bulls have the overall near-term technical advantage as prices hover near a two-month high. The 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 moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the May high of 2,741.25 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,724.25 and then at last week’s low of 2,700.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index December futures: Prices are modestly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 6,957.00 and then at 6,976.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen the overnight low of 6,908.75 and then at Monday’s low of 6,881.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are weaker in early U.S. trading, and not far above last week’s contract low. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 141 18/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 140 25/32 and then at 140 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 early today. Prices hit a contract low last week. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 the overnight high of 118.30.5 and then at 119.05.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 118.21.0 and then at 118.16.0. 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 lower on profit taking after hitting a six-month high on Monday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 93.650 and then at Monday’s high of 93.965. Shorter-term support is seen at the overnight low of 93.200 and then at 93.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
July Nymex crude oil prices are higher and hit a 3.5-year high in early U.S. trading. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at $73.00 and then at $74.00. Look for sell stops just below technical support at $72.00 and then at $71.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were higher overnight. Bulls have upside momentum amid an easing of U.S.-China trade tensions and as some weather firms have forecast a hotter and drier summer in the U.S. Corn Belt.