Friday, May 31–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
On this last day of the month, the Euro currency was under pressure overnight following another downbeat economic report coming out of the European Union. Euro zone unemployment rose to a record high of 12.2% in April. Leading EU economy Germany saw its retail sales fall for a third month in a row during April. Inflationary pressures in the Euro zone remain subdued, as the April EU consumer price index was up 1.4%, on an annualized basis. Asian stock markets were mixed overnight, with Japan’s Nikkei index posting modest gains. The Nikkei index did close out the month of May with a net decline for the first time in over a year. The market place is awaiting key manufacturing data coming out of China on Saturday. U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.–Jim U.S.
STOCK INDEXES
S&P 500 futures: Prices are weaker early today on profit taking. Bulls still have the overall near-term technical advantage. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,655.80 and then at this week’s high of 1,672.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,640.00 and then at last week’s low of 1,632.70. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are lower early today on profit taking. Bulls still have the overall near-term technical advantage. The 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 bearish early today. Shorter-term technical resistance is located at the overnight high of 3,014.25 and then at Thursday’s high of 3,025.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,985.75 and then at this week’s low of 2,978.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are lower early today on profit taking. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 15,300 and then at 15,350. Sell stops likely reside just below technical support at 15,200 and then at 15,150. Shorter-term moving averages are still bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher early today on short covering in a bear market. Bears still have the solid overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 141 14/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 141 even and then at the overnight low of 140 18/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are higher early today on short covering in a bear market. Bears stilll have the solid 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 bullish early today. Shorter-term resistance lies at the overnight high of 129.30.5 and then at 130.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129.17.0 and then at 129.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The U.S. dollar index is firmer in early U.S. trading, on a corrective bounce from recent selling presssure. Bulls still have the overall near-term technical advantage, but have faded as trading is choppy. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.525 and then at 83.500. Shorter-term support is seen at this week’s low of 83.010 and then at 82.750. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are lower early today as the bulls are fading. In July Nymex crude, look for buy stops to reside just above resistance at $93.00 and then at the overnight high of $93.85. Look for sell stops just below technical support at last week’s low of $92.21 and then at this week’s low of $91.65. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were higher in overnight trading. Very wet U.S. Corn Belt weather has caused planting delays in both corn and soybeans, which is bullish for both markets. An Iowa farmer told me if no more rain falls in the near-term it would still be at least a week before he could get back to his fields to resume planting. Unfortunately, more rains are in the Corn Belt forecast. Wheat futures bears remain in control. Traders will closely examine Friday morning’s weekly USDA export sales report, delayed by one day due to the holiday on Monday.
