Thursday, April 23–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock indexes are seeing a corrective bounce at mid-week, following solid losses scored on Monday and Tuesday. The U.S. equity traders are watching corporate earnings reports that have started to come out this week, but have so far been mostly overshadowed by the collapse in the global crude oil market.
Global stock markets were narrowly mixed in overnight trading. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The stock markets are working to recover from early-week pressure tied to the historic collapse in crude oil prices. Oil prices are solidly higher again today, with Nymex West Texas Intermediate (WTI) June futures trading up around $2.00 at $15.50. U.S.-Iran tensions up-ticked Wednesday when President Trump tweeted that he has instructed the U.S. navy to “destroy” any Iranian vessels that harass U.S. ships.
North American and European citizens are still mostly locked down as the debate intensifies on the question of when to reopen local, regional and national economies. Opinions on the matter very widely, with there being no absolutely correct answer.
In more signs the Covid-19 pandemic is wreaking severe pain on the global economy, the Euro zone April composite purchasing managers index (PMI) came in at 13.5 versus 29.7 in March. The April reading was well below market expectations. A reading below 50.0 suggests contraction.
The other important outside markets today see the U.S. dollar index firmer. Greenback bulls remains strong. The 10-year U.S. Treasury note yield is trading around 0.625% this morning—up from levels seen earlier this week and a sign of a bit less anxiety in the marketplace.
U.S. economic reports due for release Thursday include the weekly jobless claims report, expected to show new claims north of 4 million. Other reports include the U.S. flash services PMI and flash manufacturing PMI, new residential sales and the Kansas City Federal Reserve manufacturing survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Prices are still in a near-term uptrend on the daily chart but the bulls need to show more power soon to keep it alive. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 2,833.25 and then at last week’s high of 2,885.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 2,717.25 and then at 2,700.00. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are slightly lower in early U.S. trading. A price uptrend is still in place on the daily chart but the bulls need to show more power soon to keep it alive. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 8,677.00 and then at Tuesday’s high of 8,763.00. On the downside, short-term support is seen at 8,500.00 and then at 8,400.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bulls have the firm technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 182 even and then at this week’s high of 183 2/32. Shorter-term support lies at this week’s low of 180 1/32 and then at 179 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 139.05.5 and then at Wednesday’s high of 139.17.0. Shorter-term technical support lies at this week’s low of 138.26.5 and then at 138.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 100.815 and then at the April high of 101.030. Shorter-term support is seen at the overnight low of 100.335 and then at 100.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are solidly higher in early U.S. trading, on short covering and bargain hunting. The bears still 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 bullish early today. Look for buy stops to reside just above technical resistance at $17.00 and then at $18.00. Look for sell stops just below technical support at the overnight low of $13.35 and then at $12.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are solidly higher in early US pre-market trading, on rumors of upcoming large Chinese purchases of U.S. grains. Traders will closely examine today’s weekly USDA export sales report—especially for increased demand from China. Technically, wheat bulls have the near-term technical advantage, while soybeans and corn bears are still in technical control.
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