Friday, May 17–Jim Wyckoff’s Morning Markets Report
World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. News reports out of China late Thursday painted a bleaker picture of the U.S.-China trade discussions, including questioning whether any further talks are scheduled between the world’s two largest economies. This has helped to pressure world stock markets to end the trading week. Also, the U.S. stock indexes have had a very good week after Monday’s sell off. It could be that traders are booking some profits heading into the weekend.
The Chinese yuan continued to depreciate against the U.S. dollar Friday, due to the U.S.-China trade war. European traders are a bit unsettled and the British pound has sold off this week on news that British Prime Minister Theresa May will resign. That’s creating more uncertainty on the Brexit matter. And the Australian dollar continues to wilt against the greenback, with the Aussie hitting lows not seen in around 10 years.
In other overnight news, the Euro zone reported its April consumer price index at up 0.7% from March and up 1.7%, year-on-year. Those numbers were right in line with market expectations.
Simmering on the back burner of the world marketplace this week is rising U.S.-Iran tensions. The U.S. has sent a naval task force to the Persian Gulf and there is talk that President Trump may send thousands more troops to the region. It’s very likely this situation will intensify before it fully plays out.
The key “outside markets” today see the U.S. dollar index slightly higher, while Nymex crude oil prices are also up and trading around $63.50 a barrel.
U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey and leading economic indicators.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading, on a corrective pullback from good gains this week. The shorter-term moving averages (4-, 9- and 18-day) are still 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 2,882.50 and then at this week’s high of 2,894.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 2,840.50 and then at 2,820.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are lower in early U.S. trading. Bulls made a good rebound this week and a corrective pullback from those gains is seen today. Shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-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 7,613.25 and then at this week’s high of 7,641.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,500.00 and then at Thursday’s low of 7,473.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading. Prices are still within easy striking distance of the contract high scored in March. Bulls have the solid 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- and 18-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 this week’s high of 150 10/32 and then at the contract high of 150 21/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 149 13/32 and then at 149 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading and not far from the March contract high. Bulls have the solid 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 to bullish early today. Shorter-term support lies at the overnight low of 124.13.0 and then at 124.05.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the this week’s high of 124.27.0 and then at the contract high of 124.31.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is firmer and hit a two-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 97.865 and then at the contract high of 98.085. Shorter-term support is seen at the overnight low of 97.590 and then at 97.265. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher and hit a two-week high in early U.S. trading. Bulls have regained upside momentum late this week. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $64.00 and then at $65.00. Look for sell stops just below technical support at the overnight low of $62.78 and then at $62.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed to firmer overnight on some consolidation from recent good gains. Grain market bulls are back in business. Closes Friday that are at or near the weekly highs would be a good clue price uptrends can be sustained. Focus is on wet weather in the Corn Belt (and more on the way) that has seriously slowed corn and soybean planting progress—to the point that yields will be impacted negatively.
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