Tuesday, April 23–Jim Wyckoff’s morning markets report
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward slightly higher openings when the New York day session begins.
A feature in the marketplace early this week is the steep drop in gold and silver prices. While major central banks and other longer-term investors have been snapping up gold bullion with no intention of selling it back anytime soon, it’s a different story with the shorter-term futures traders and the high leverage involved. That’s what’s driving this week’s downdraft in gold and silver prices: weak-handed futures traders (both in the U.S. and overseas futures markets) who are under water. Many of them are likely getting margin calls from their brokers. These shorter-term speculators are being forced to liquidate their losing long positions. Also, the fortunate futures traders that still hold a profit are taking those profits and getting out of the gold and silver futures markets. This is not anything new in futures markets trading. While the gold and silver bulls have lost their upside momentum, both markets remain overall firmly technically bullish. This week’s sell offs in the gold and silver markets are still just significant downside price corrections in major bull runs. However, if the sharp selling pressure continues deeper into this week, near-term technical damage would likely be inflicted to begin to suggest near-term market tops, if not major market tops, are in place. Trading action in gold and silver the rest of this week will be extra important. The bulls need to step up, stop the bleeding and show some fresh power soon to keep their bull runs alive.
In other news, the Japanese yen continues to depreciate against the U.S. dollar. Japan’s finance minister today said the Japanese government will take appropriate measures against excessive currency moves, and that the government is watching the yen’s situation with a sense of urgency. Meantime a Bank of Japan governor said the BOJ will raise short-term interest rates if inflation moves toward 2%, as the BOJ expects to happen.
U.S. economic data due for release Tuesday includes the Johnson Redbook retail sales report, the U.S. flash manufacturing and services purchasing managers indexes (PMI), the Richmond Fed business survey, and new residential sales.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls still have the overall near-term technical advantage but have faded to suggest a near-term market top is in place. 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 bullish early today. Today, shorter-term technical resistance comes in at 5,100.00 and then at 5,125.00. Support for active traders is seen at Monday’s low of 5,006.00 and then at last week’s low of 4,963.50. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage but have faded to suggest a near-term market top is in place. 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 to bullish early today. Shorter-term technical resistance is seen at 17,500.00 and then at 17,600.00. On the downside, shorter-term support is seen at the overnight low of 17,286.25 and then at last week’s low of 17,113.25. 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 115 even and then at Monday’s high of 116 5/32. Shorter-term support lies at 114 even and then at the April low of 113 10/32. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are slightly lower 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 to bearish early today. Shorter-term resistance lies at 108.00.0 and then at 108.16.0. Shorter-term technical support is seen at the April 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: 4.5
EURO CURRENCY
The June Euro currency futures are slightly up in early U.S. trading. 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 the overnight high of 1.0718 and then at 1.0758. Shorter-term support is seen at the April low of 1.0628 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly lower in early U.S. trading. Bulls are fading. 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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $83.01 and then at $84.00. Look for sell stops just below technical support at this week’s low of $80.70 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were firmer overnight. Finally, bulls have some positive news. Recent price gains in corn, soybeans and wheat futures markets are providing good clues that market bottoms are in place. More gains in the near term would suggest price uptrends can be developed and potentially sustained.
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