Wednesday, April 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to mostly firmer overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. It’s a big day for markets Wednesday. The data point of the week is the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Powell. While no change in U.S. monetary policy is expected, the marketplace will closely scrutinize the Fed’s inflation outlook and any comments on the future path of monetary policy. Also, President Biden today is set to lay out to a joint session of Congress another big government spending program in order to continue to pry the U.S. economy away from the grip of the pandemic. Biden’s $1.8 trillion “American Families Plan” includes $1 trillion in spending and $800 million in tax cuts and credits for middle- and lower-income American families. The 10-year plan would be part funded by increased taxes and wealthy Americans.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are higher and trading around $63.15 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.64%. Bond yields are on the rise again at mid-week.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the advance economic indicators report and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up in early U.S. trading and near this week’s contract and record high. Bulls have the solid overall near-term technical advantage. There are no early clues to suggest a market top is close at hand. 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 to bullish early today. Today, shorter-term technical resistance comes in at the record high of 4,192.50 and then at 4,200.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 4,163.75 and then at 4,150.00. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are a bit weaker in early U.S. trading and not far below last week’s record high. 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 neutral early today. Shorter-term technical resistance is seen at the contract and record high of 14,059.50 and then at 14,100.00. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at this week’s low of 13,865.50 and then at last week’s low of 13,700.50. 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 lower in early U.S. trading today. Bears have the 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. 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 158 even and then at this week’s high of 158 22/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 156 29/32 and then at 156 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. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 132.02.5 and then at 132.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.25.5 and then at 131.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. 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 bearish today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2103 and then at this week’s high of 1.2129. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2050 and then at 1.2000. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage and they are having a good week, so far. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above 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 $63.50 and then at $64.00. Look for sell stops just below technical support at the overnight low of $62.27 and then at $62.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are solidly lower in early U.S. pre-market trading, on profit taking and some chart consolidation after recent very strong gains that pushed prices to multi-year highs. The grain markets had gone nearly “parabolic”—meaning nearly straight up. History suggests such price moves mean market tops are getting closer. The bulls still have the solid overall near-term technical advantage. However, the psychology of the marketplace should be at least a bit worrisome for the bulls. Reason: All of the bullish fundamental news for the grains may now be factored into the futures price structure. Remember that a big bull market in the grains needs to be fed fresh fundamental fodder often. Stay tuned right here and in my afternoon reports, to get the very early clues on when the price trend may change.
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