Thursday, May 3–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.
The marketplace has quickly moved past Wednesday afternoon’s FOMC statement, which announced no change in U.S. monetary policy, and hinted that the Federal Reserve is not quite as concerned about inflationary pressures as in recent months.
In overnight news, the inflation rate in the Euro zone was up 1.2% in April versus up 1.3% in March, on an annual basis. The European Central Bank would like to see annual inflation at 2.0%.
The World Gold Council reported today that global demand for the yellow metal fell 7% in the first quarter of this year, compared to the same period last year. India and China led the decline, on weakening demand for bars and coins.
A U.S. high-level trade delegation is in China Thursday to try to avert a trade war between the world’s two largest economies. The marketplace will closely watch the news outlets for updates on progress at the meeting.
On Friday is the April U.S. employment report from the Labor Department—arguably the most important U.S. data point of the month. The key non-farm payrolls number is forecast to come in at up 195,000.
The outside markets today see the U.S. dollar index slightly lower on a corrective pullback after hitting a 4.5-month high on Wednesday. Meantime, Nymex crude oil prices are slightly up and trading around $68.00 a barrel.
It’s a busy day for U.S. economic data Thursday, including the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, the international trade report, the U.S. services PMI, manufacturers’ shipments and inventories, and the ISM non-manufacturing report on business.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. The bulls and bears are on a level overall near-term technical playing field amid choppy trading. The 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 moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 2,658.50 and then at this week’s high of 2,682.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,623.25 and then at last week’s low of 2,611.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index December futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral 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 6,700.00 and then at this week’s high of 6,740.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,600.00 and then at this week’s low of 6,578.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer in early U.S. trading. Bears still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 143 28/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term support lies at 143 even and then at this week’s low of 142 22/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher in early U.S. trading today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 119.22.5 and then at 119.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.14.0 and then at this week’s low of 119.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower in early U.S. trading today, on mild profit taking after hitting a four-month high on Wednesday. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 92.665 and then at 93.000. Shorter-term support is seen at 92.000 and then at Tuesday’s low of 91.595. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly up in early U.S. trading. Bulls are still in firm near-term technical control. Look for buy stops to reside just above technical resistance at $68.90 and then at this week’s high of $69.34. Look for sell stops just below technical support at this week’s low of $66.85 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were mixed overnight. Traders will closely examine today’s weekly USDA export sales report. Speculative traders are taking more interest in the long side of the grains, including the big “funds.” Grain market bulls still have the overall near-term technical advantage.