Wednesday, April 26–Jim Wyckoff’s morning markets report
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Focus of stock traders this week is on the release of quarterly corporate earnings reports. So far, they have been mixed.
Traders at mid-week are buzzing about First Republic Bank’s quarterly earnings report on Tuesday that was worse than expected, including a huge outflow of deposits. Reports said the bank’s conference call on its earnings was very brief, with no questions taken from reporters. That prompted a nearly 50% drop in the bank’s share price Tuesday, including trading in the stock being halted for a while.
U.S. and/or global recession fears appear to be moving back toward the front burner of the marketplace. Diesel fuel prices in the U.S. have plunged in recent months and are about half of what they were one year ago. Such suggests a slowdown in the commercial transportation sector that could be a signal of a slowing U.S. economy. United Parcel Service (UPS) on Tuesday issued a downbeat corporate earnings report, saying “macro conditions” would likely continue to pressure its delivery volume.
In overnight news, Sweden’s central bank raised its main interest rate by 0.5%, saying inflation is still far too high.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are firmer and trading around $77.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.413%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, advance economic indicators and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have faded a bit this week as a price uptrend on the daily chart has stalled out. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 4,135.00 and then at this week’s high of 4,164.00. Support for active traders is seen at this week’s low of 4,091.50 and then at 4,050.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have faded recently as a price uptrend on the daily 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 and 18-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 this week’s high of 13,134.00 and then at the April high of 13,348.75. On the downside, shorter-term support is seen at this week’s low of 12,800.00 and then at 12,700.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading, on a corrective pullback from this week’s good gains. 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 neutral early today. Shorter-term technical resistance is seen at this week’s high of 132 20/32 and then at 133 even. Shorter-term support lies at 131 16/32 and then at Tuesday’s low of 130 30/32. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker in early U.S. trading. 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 neutral early today. Shorter-term resistance lies at this week’s high of 115.30.0 and then at 116.10.0. Shorter-term technical support is seen at 115.16.0 and then at Tuesday’s low of 115.01.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are solidly up in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the April high of 1.1114 and then at 1.1150. Shorter-term support is seen at 1.1000 and then at last week’s low of 1.0947. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly up in early U.S. trading. Bulls have faded recently. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $79.18 and then at $80.00. Look for sell stops just below technical support at this week’s low of $76.50 and then at $75.83. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed overnight. The July futures contracts in grains see the technical postures for all the markets bearish. Risk-off trading attitudes in the general marketplace this week are also negative for the grains, including rising fears of a U.S. recession. Focus of grain traders is also on weather in the U.S. Midwest, Plains and mid-South as corn and soybean planting gets under way.
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