Tuesday, April 20–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. indexes are pausing early this week after hitting record highs last week. There is no major U.S. economic data due for release Tuesday and the pace for U.S. data is slow up until Thursday. Focus of equity traders is presently on quarterly earnings reports, which are expected to be mostly upbeat as the U.S. rolls out of its pandemic-inducted economic slowdown.
In another sign that inflation could become problematic in the coming months, or sooner, SP Angel this morning said in an email dispatch: “U.S. ports are breaking new records for imports as shops and online retailers stock up ahead of new consumer splurge. Volumes at the Port of Los Angeles rose nearly 123%, year-on-year, and also up 65% from 2019. Imports have climbed to high levels driven by Biden’s ‘go big’ stimulus and by consumer exuberance led by the rapid roll out of vaccinations in the U.S.” If such a scenario does indeed play out it would be bullish for hard assets like precious metals and real estate, and bearish for paper assets like stocks and bonds.
The key outside markets today see the U.S. dollar index near steady hitting a six-week low overnight. The greenback bears are in control at present. Nymex crude oil prices are firmer, hit a four-week high overnight, and are trading around $64.00 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.622%–creeping back up this week.
U.S. economic data due for release today is light and includes the weekly Johnson Redbook and Goldman Sachs retail sales reports.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading on a corrective pullback after hitting a contract and record high last Friday. Bulls still have the solid 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,167.25 and then at the record high of 4,183.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,120.00 and then at 4,100.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly lower in early U.S. trading on a downside correction after hitting a record high late last week. 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 above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,933.75 and then at the contract high of 14,059.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,800.00 and then at 13,700.00. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly up in early U.S. trading today. Bears have the overall near-term technical advantage. However, recent sideways-to-higher price action at lower levels may be “basing” that puts in a market bottom. Prices are also in a fledgling uptrend on the daily chart. 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 technical resistance is seen at 158 even and then at last week’s high of 159 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 156 27/32 and then at 156 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly up in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Monday’s high of 132.18.0 and then at last week’s high of 132.22.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.31.5 and then at 131.26.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The June Euro currency futures are a higher in early U.S. trading and hit a seven-week high. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2093 and then at 1.2150. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2000 and then at this week’s low of 1.1956. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly higher and hit a four-week high in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $64.38 and then at $65.00. Look for sell stops just below technical support at this week’s low of $62.27 and then at $62.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are again higher to solidly higher in early U.S. pre-market trading. Prices are near their recent highs. Weather in the U.S. midsection will be market-sensitive in the coming weeks as corn planters start to roll. Right now, cold weather and some snow for the Corn Belt are supportive for prices. The world supply and demand balance sheet for the grains remains bullish—especially for corn and 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