Wednesday, April 17–Jim Wyckoff’s morning markets report
Federal Reserve Chairman Jerome Powell in remarks on Tuesday afternoon cast a hawkish tone on U.S. monetary policy. He said U.S. inflation persists, calling into question whether the Fed can cut interest rates this year. He suggested interest rates may have to remain higher for longer, to get inflation back down to a level where the Fed feels more comfortable. U.S. Treasury yields rose to five-month highs after Powell’s comments.
In overnight news, the Euro zone consumer price index for March came in at up 2.4%, year-on-year, which was in line with market expectations.
Risk aversion remains elevated at mid-week, after the weekend air attack on Israel by Iran and its proxies. Israel has vowed to retaliate.
In other news, broker SP Angel reported overnight that metals analysts say central banks are buying around 25% of annual gold production–the highest level since the early 1970s when the Bretton Woods accord unraveled.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report and the Federal Reserve’s beige book.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading after hitting a seven-week low overnight. Bulls still have the overall near-term technical advantage but have faded. A five-month-old uptrend on the daily bar chart has been negated. The shorter-term moving averages (4-day, 9-day and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 5,150.00 and then at 5,200.00. Support for active traders is seen at the overnight low of 5,075.75 and then at 5,050.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are slightly up in early U.S. trading after hitting a seven-week low overnight. Bulls have the overall near-term technical advantage but are fading. A five-month-old uptrend on the daily bar chart has been negated. 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 18,000.00 and then at 18,150.00. On the downside, shorter-term support is seen at the overnight low of 17,778.00 and then at 17,600.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices are trending lower on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Tuesday’s high of 114 24/32 and then at this week’s high of 116 1/32. Shorter-term support lies at this week’s low of 113 10/32 and then at 113 even. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Tuesday’s high of 108.04.0 and then at this week’s high of 108.22.0. Shorter-term technical support is seen at this week’s low of 107.13.5 and then at 107.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are slightly firmer on short covering after hitting a 5.5-month low Tuesday. Bears have the firm 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 and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at 1.0700 and then at 1.0758. Shorter-term support is seen at this week’s low of 1.0628 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
May Nymex crude oil prices are slightly weaker 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 this week’s high of $86.18 and then at last week’s high of $87.67. Look for sell stops just below technical support at this week’s low of $84.05 and then at $83.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed overnight. Still not much new in the grains. Charts remain overall bearish for corn, wheat, soybeans, meal and bean oil. However, wheat and corn markets look like they have put in market bottoms. And if they have done so, so likely have soybeans, meal and bean oil.
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