FOMC results this p.m.

Wednesday, May 1–Jim Wyckoff’s morning markets report

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward lower openings when the New York day session begins.

The highly anticipated Federal Reserve Open Market Committee (FOMC) meeting ends this afternoon with a statement and press conference from Fed Chair Jerome Powell. No changes in monetary policy are expected, but the FOMC statement and Powell’s presser will be very closely scrutinized by the marketplace. Recent warmer U.S. inflation data has prompted most traders and analysts to dial back their timelines on any interest rate cuts from the Fed, if they come at all this year. There is a small camp of Fed watchers that think the next interest rate move by the Fed will be to hike. Most expect Powell to remain hawkish on U.S. monetary policy in his remarks today. Markets could become more active this afternoon. A Wall Street Journal headline today reads: “Fed has patience to let high rates work.”

On Friday morning comes the U.S. jobs report from the Labor Department.

The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are lower and trading around $80.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.69%.  

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing PMI, the ISM report on business manufacturing, construction spending, the job openings and labor (JOLTS) report, domestic auto industry sales and the weekly DOE liquid energy stocks report.

STOCK INDEXES

June S&P 500 e-mini futures: Prices are lower in early U.S. trading. The shorter-term moving averages (4-day, 9-day and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at 5,085.00 and then at 5,100.00. Support for active traders is seen at 5,000.00 and then at the April low of 5,037.75. Wyckoff’s Intra-day Market Rating: 4.0

June Nasdaq index futures: Prices are down in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 17,600.00 and then at 17,750.00. On the downside, shorter-term support is seen at Monday’s low of 17,300.00 and then at 17,200.00. Wyckoff’s Intra-Day Market Rating: 4.0.

U.S. TREASURY BONDS AND NOTES FUTURES

June U.S. T-Bonds: Prices are slightly weaker 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 114 25/32 and then at 115 even. Shorter-term support lies at 113 16/32 and then at 113 even. Wyckoff’s Intra-Day Market Rating: 4.5

June U.S. T-Notes: Prices are near steady 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 108.00.0 and then at last week’s high of 108.08.0. Shorter-term technical support is seen at the April low of 107.04.0 and then at 107.00.0. Wyckoff’s Intra-Day Market Rating: 5.0

EURO CURRENCY

The June Euro currency futures are slightly lower in early U.S. trading. The shorter-term moving averages for the Euro are neutral today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0775 and then at 1.0800. Shorter-term support is seen at last week’s low of 1.0648 and then at the April low of 1.0628. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

June Nymex crude oil prices are lower and hit a five-week low in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $82.00 and then at last week’s high of $84.46. Look for sell stops just below technical support at $80.00 and then at $79.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Grain futures prices were mixed to weaker overnight. Markets are seeing selling this week amid fears of “stagflation” in the U.S. economy in the coming months. Wheat and soybean meal prices are still trending higher but bulls have faded this week.

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