Monday, April 25–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight, led by the biggest drop in Chinese shares in two years. U.S. stock indexes are pointed toward lower openings when the New York day session begins. There are growing worries about the economic toll of China’s strict zero Covid policy, as lockdowns spread to Beijing. The Chinese yuan dropped to its lowest level against the U.S. dollar since late 2020. The Covid flareup that shut down much of Shanghai appeared to worsen over the weekend. China ordered mandatory tests in a district of Beijing and shut down some areas of the capital of more than 20 million people. This situation is expected to further disrupt already strained global supply chains and likely drive already problematic inflation still higher.
The Russia-Ukraine war that shows no signs of de-escalating continues to sap trader and investor risk appetite.
The key outside markets see Nymex crude oil futures prices sharply lower today and trading around $97.75 a barrel. The U.S. dollar index is higher and hit a two-year high early today. The yield on the 10-year U.S. Treasury note is presently fetching 2.833%.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower and hit a nearly six-week low in early U.S. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,267.25 and then at 4,300.00. Support for active traders is seen at 4,200.00 and then at 4,150.00. Wyckoff’s Intra-day Market Rating: 3.5
June Nasdaq index futures: Prices are lower and hit a nearly six-week low in early U.S. trading. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,360.00 and then at 13,500.00. On the downside, shorter-term support is seen at the overnight low of 13,200.00 and then at 13,000.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading on short covering. Bears are still in solid technical control. 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 technical resistance is seen at 142 even and then at 143 even. Shorter-term support lies at 140 16/32 and then at the overnight low of 139 28/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Bears are still in solid near-term technical control. 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 119.25.5 and then at 120.00.0. Shorter-term technical support lies at 119.00.0 and then at the overnight contract low of 118.26.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are lower and hit a contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.0800 and then at the overnight high of 1.0840. Shorter-term support is seen at the overnight low of 1.0728 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $100.00 and then at the overnight high of $101.55. Look for sell stops just below technical support at the overnight low of $96.85 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
U.S. grain futures prices were mixed in early U.S. pre-market trading. Corn and soybean bulls have the solid overall near-term technical advantage but may be running out of gas. Wheat bulls have faded. If wheat futures continue to sag then the upside will also be limited in corn and soybeans. Wheat may be the most important grain market to watch in the coming sessions. On tap today is the weekly USDA export inspections report.
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