Wednesday, April 24–Jim Wyckoff’s morning markets report
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed to toward narrowly mixed openings when the New York day session begins.
An important theme has developed in the marketplace, especially in the foreign exchange market, the past few months. DowJones Newswires today has a headline that reads: “Asian central banks face policy dilemma from Fed rate-cut delay, FX crunch.” In the story, reporter Fabiana Negrin Ochoa says a surprise rate hike by Indonesia’s central bank accentuates expectations that the start of monetary policy easing is looking increasingly far off for many Asian central banks — if on the horizon at all. The Asian central banks fear they cannot cut rates before the Federal Reserve because it would further undermine their currencies that are already feeling the pressure of an appreciating U.S. dollar. Asian central banks lowering rates before the Fed does risks pushing inflation in the region higher. Yet, by delaying rate cuts the Asian central banks risk curbing economic growth by keeping borrowing costs higher. Recently, the Japanese yen and Chinese yuan have depreciated significantly against the dollar, as well as the currencies of South Korea, Indonesia and Malaysia.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders and the weekly DOE liquid energy stocks report.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly firmer in early U.S. trading. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-day, 9-day 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 to bullish early today. Today, shorter-term technical resistance comes in at 5,150.00 and then at 5,185.00. Support for active traders is seen at Tuesday’s low of 5,037.75 and then at this week’s low of 5,006.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 17,800.00 and then at 17,900.00. On the downside, shorter-term support is seen at 17,500.00 and then at Tuesday’s low of 17,286.25. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Prices are trending lower 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 115 even and then at 116 5/32. Shorter-term support lies at this week’s low of 113 31/32 and then at the April low of 113 10/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. 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 neutral early today. Shorter-term resistance lies at this week’s high of 108.08.0 and then at 108.16.0. Shorter-term technical support is seen at this week’s low of 107.17.5 and then at the April low of 107.13.5. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the firm near-term technical advantage as prices are trending down on the daily bar chart. The shorter-term moving averages for the Euro are neutral today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0738 and then at 1.0800. Shorter-term support is seen at the April low of 1.0628 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $83.71 and then at $85.00. Look for sell stops just below technical support at this week’s low of $80.70 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were narrowly mixed overnight. Recent price gains in corn, soybeans and wheat futures markets are providing good clues that market bottoms are in place. More gains in the near term would suggest price uptrends can be developed and potentially sustained.
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