Thursday, April 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings and new record highs for the S&P 500 when the New York day session begins. The marketplace is upbeat late this week after Wednesday’s conclusion of the FOMC meeting that saw the U.S. central bank keep its monetary policy very accommodative, and also after President Biden’s Wednesday evening address to Congress, in which he laid out plans for a massive $1.8 trillion economic stimulus program. “In this environment it is very difficult to be bearish,” said one stock market analyst. Federal Reserve Chairman Jerome Powell on Wednesday afternoon dismissed the notion of price inflation getting out of control, saying presently rising inflation levels are due to “transitory factors.”
Commodity market watchers may beg to differ with the Fed’s notion that accelerating inflation is just a temporary matter. Several markets this week, including grains, lumber, copper and coffee prices this week hit multi-year highs. Lumber prices have skyrocketed to record highs. The “reflation trade” has yet to significantly boost gold and silver prices, however, as traders are apparently assigning more market weight to those metals’ safe-haven status amid little risk aversion in the marketplace, as opposed to viewing the metals as a hard-asset hedge against inflation.
The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are higher, hit a six-week high overnight and are trading around $64.75 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.649%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the first-quarter GDP report, and pending home sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are up in early U.S. trading and hit another contract and record high overnight. Bulls have the strong 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 bullish early today. Today, shorter-term technical resistance comes in at the record high of 4,225.00 and then at 4,250.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 4,183.50 and then at this week’s low of 4,163.75. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 7.0
June Nasdaq index futures: Prices are higher in early U.S. trading and close to 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 bullish 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 the overnight low of 13,952.50 and then at this week’s low of 13,865.50. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower and hit a two-week low in early U.S. trading today. Bears have the overall near-term technical advantage and have regained momentum this week. 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 the overnight high of 157 20/32 and then at 158 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 156 25/32 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 in early U.S. trading. Bears are gaining momentum this week. 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 132.05.5 and then at 132.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131.23.0 and then at 131.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are near steady in early U.S. trading after hitting a two-month high overnight. 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 early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2161 and then at 1.2200. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2100 and then at this week’s low of 1.2067. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
June Nymex crude oil prices are up and hit a six-week high in early U.S. trading. Bulls have the firm overall near-term technical advantage and they are having a good week. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $65.00 and then at $66.00. Look for sell stops just below technical support at the overnight low of $63.65 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures are mixed but mostly higher in early U.S. pre-market trading. The grain market bulls have the solid overall near-term technical advantage amid price uptrends in place on the daily and the longer-term charts. On tap today is the weekly USDA export sales report.
Stay tuned right here and in my afternoon reports, to get the very early clues on when the price trends in the grains 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