Tuesday, May 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The benchmark 10-year U.S. Treasury note sees its yield back above 3.0% today.
A downbeat economic growth report from the European Union helped to weigh on equities. First-quarter Euro zone GDP growth came in at up a paltry 0.4%–down from the 0.7% growth rate (quarter-on-quarter) seen in the fourth quarter of last year. Year-on-year 1Q GDP was up 2.5%.
There was a mixed bag of economic data coming out of China today. Industrial output was up more than expected, but retail sales were down more than expected.
Focus of the marketplace this week is on U.S. trade meetings with China that are scheduled to begin in the U.S. today, and a possible U.S. decision on the NAFTA trade agreement with Canada and Mexico.
The key “outside markets” today find Nymex crude oil prices firmer and above $71.00 a barrel. The U.S. dollar index is firmer today.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, monthly retail sales, the Empire State manufacturing survey, the NAHB housing market index, and manufacturing and trade inventories.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower on mild profit taking after hitting a seven-week high on Monday. The bulls have the overall near-term technical advantage. 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 Monday’s 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 last Friday’s low of 2,716.25 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index December futures: Prices are slightly lower on profit taking after hitting a seven-week high on Monday. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Monday’s high of 7,013.50 and then at 7,050.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,946.00 and then at last Friday’s low of 6,928.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower and hit a two-week low in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 142 23/32 and then at 143 even. Buy stops likely reside just above those levels. Shorter-term support lies at 142 even and then at the contract low of 141 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 lower and hit a two-week low in early U.S. trading today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 119.07.0 and then at Monday’s high of 119.15.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 118.31.0 and then at 118.24.0. 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 firmer today. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 92.710 and then at 93.000. Shorter-term support is seen at the overnight low of 92.480 and then at this week’s low of 92.115. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are higher in early U.S. trading, and not far below last week’s 3.5-year high. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at last week’s high of $71.89 and then at $72.50. Look for sell stops just below technical support at $71.00 and then at Monday’s low of $70.26. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were firmer overnight on short covering. The bulls have faded recently, amid good planting progress in the U.S. Corn Belt. Weather in the Corn Belt will be a major fundamental factor for the next three months. So will USDA export sales reports.