Monday, April 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Highlighted to start the trading week is a big drop in crude oil prices, with Nymex crude trading down nearly $3.00 a barrel at $14.15. There is growing talk that Nymex crude prices will again fall into negative territory when the June contract nears expiration in late May. There is no place to store oil amid a glutted world market that has seen such a demand shock. Another U.S. oil producer, Diamond Offshore, filed for bankruptcy over the weekend.
Some regions in some countries, including the U.S., are starting to reopen from the Covid-19-induced lockdown. However, leading U.S. health officials over the weekend said social-distancing restrictions will likely remain in effect all summer.
Key central bank meetings occur this week, including those of the Federal Reserve (FOMC) and the European Central Bank. The Bank of Japan further eased its monetary policy on Monday. More key U.S. corporate earnings reports are due out this week.
The other important outside markets today see the U.S. dollar index solidly lower. The 10-year U.S. Treasury note yield is trading around 0.625% this morning.
U.S. economic reports due for release Monday include the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Price action has been mostly sideways the past two weeks but they are still in a near-term uptrend on the daily chart but just barely. 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 April high of 2,885.00 and then at 2,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 2,812.75 and then at 2,775.00. Wyckoff’s Intra-day Market Rating: 6.5
June Nasdaq index futures: Prices are higher in early U.S. trading. A price uptrend is still in place on the daily chart. 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 8,898.00 and then at the April high of 8,966.75. On the downside, short-term support is seen at the overnight low of 8,730.00 and then at 8,600.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Bulls still have the firm technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 182 3/32 and then at last week’s high of 183 2/32. Shorter-term support lies at 181 even and then at last week’s low of 180 1/32. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the solid 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 resistance lies at the overnight high of 139.01.5 and then at last Friday’s high of 139.07.5. Shorter-term technical support lies at the overnight low of 138.24.0 and then at 138.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is lower in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 99.845 and then at 100.000. Shorter-term support is seen at 99.500 and then at 99.250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are sharply lower in early U.S. trading. The bears have the solid overall near-term technical advantage. The shorter-term moving averages are bearish early today as the 4-day is below the 18-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 $15.00 and then at $16.00. Look for sell stops just below technical support at $14.00 and then at $13.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
US grain futures are lower in early US pre-market trading. Expected large Chinese purchases of U.S. grains gave prices a lift last week. However, that positive has quickly faded amid the grim reality of less worldwide demand amid the pandemic. It now appears last week’s gains were just corrective bounces in bear markets for corn and soybeans. Wheat bulls are now fading, too. Traders will closely examine Monday morning’s 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