Tuesday, May 14–Jim Wyckoff’s Morning Markets Report
World stock markets were mixed overnight, with European indexes mostly higher and Asian stocks mostly weaker. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The world stock markets are trying to stabilize following Monday’s rout in the wake of the failed U.S. trade talks and the imposition of new tariffs by the U.S. and China against each other.
There has been technical damage inflicted on U.S. stock indexes to suggest they have put in near-term tops and can now only trade sideways at best for at least the time being.
Many commodity markets have been hit hard by the U.S.-China trade war, including grain and livestock markets that are presently at multi-month or multi-year lows.
The key “outside markets” today see the U.S. dollar index slightly higher. The greenback bulls have faded a bit recently. Meantime, Nymex crude oil prices are higher and trading around $62.25 a barrel. There are technical clues the oil market has put in a near-term top.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIB small business index, and import and export prices.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading after hitting a six-week low overnight. Bulls have faded recently to suggest a market top is in place. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Monday’s high of 2,869.25 and then at last Friday’s high of 2,893.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,799.75 and then at 2,789.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading, on short covering, after hitting a six-week low overnight. Bulls have faded recently to suggest a market top is in place. Shorter-term moving averages (4- 9-and 18-day) are 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 7,450.00 and then at 7,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,290.00 and then at 7,250.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker on a corrective pullback after hitting a six-week high Monday. 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 bullish early today. Shorter-term technical resistance is seen at Monday’s high of 149 23/32 and then at 150 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 148 22/32 and then at 148 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly lower on a corrective pullback after hitting a six-week high Monday. 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 early today. Shorter-term support lies at Monday’s low of 124.00.0 and then at 123.24.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at Monday’s high of 124.18.0 and then at 124.24.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly higher early today. Bulls still have the overall near-term technical advantage but have faded recently. The shorter-term moving averages for the dollar index are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below 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 97.300 and then at last week’s high of 97.510. Shorter-term support is seen at 97.000 and then at Monday’s low of 96.810. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are higher in early U.S. trading. Bulls have faded recently to suggest a market top is in place. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $62.00 and then at $63.00. Look for sell stops just below technical support at Monday’s low of $60.64 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were firmer overnight on short covering and a corrective bounce from recent strong selling pressure that put markets at contract lows. Grain market bears still have the solid overall near-term technical advantage. The U.S.-China trade uncertainty will continue to keep buyers scarce. Corn Belt weather that is still wet, and more scattered rains in the forecast, is friendly for corn but bearish for soybeans.
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