Friday, April 12–Jim Wyckoff’s morning markets report
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward mixed openings when the New York day session begins. The U.S. stock indexes have turned wobbly this week after a hotter U.S. consumer price index report on Wednesday. Reads a Wall Street Journal headline today: “Fed rate cuts are now a matter of if, not when.”
Geopolitical tensions are heightened to end the trading week. The Wall Street Journal reported Israel is set for another assault against Iran following an air strike on an Iranian compound last week. Meantime, Iran has threatened retaliation, and said it may block the important Strait of Hormuz, a vital global shipping route.
Gold hit another record high overnight on the keener risk aversion. Precious metals bulls have been impressed with gold and silver rallying despite higher bond yields. Broker SP Angel said in a morning email dispatch that Bloomberg reported Chinese gold ETFs have seen huge inflows, with some up 40% since the end of March. “Chinese investors are rushing to safe haven assets as their property sector continues to slump and their equity market fares little better. China’s Yuan remains under pressure, with the PBoC continuing to fix the currency onshore at 7.1 per dollar,” said the broker. Central banks are also reported to be snapping up gold.
U.S. economic data due for release Friday includes import and export price indexes and the University of Michigan consumer sentiment survey.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage but are fading a bit. A five-month-old uptrend on the daily bar chart has stalled out. 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 bearish early today. Today, shorter-term technical resistance comes in at 5,250.00 and then at this week’s high of 5,285.00. Support for active traders is seen at this week’s low of 5,173.50 and then at 5,150.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage but are fading. A five-month-old uptrend on the daily bar chart has stalled out. 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 is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 18,518.75 and then at the contract high of 18,709.00. On the downside, shorter-term support is seen at 18,200.00 and then at this week’s low of 18,053.50. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering after hitting a four-month low Thursday. 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 116 even and then at 117 even. Shorter-term support lies at this week’s low of 114 29/32 and then at 114 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are higher in early U.S. trading on short covering after hitting a five-month low Thursday. 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 108.24.0 and then at 109.00.0. Shorter-term technical support is seen at the overnight low of 108.00.5 and then at this week’s low of 107.27.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are sharply lower and hit a 5.5-month low 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0758 and then at 1.0800. Shorter-term support is seen at 1.0650 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
May Nymex crude oil prices are higher 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 neutral early today. Look for buy stops to reside just above technical resistance at last week’s high of $87.63 and then at $89.00. Look for sell stops just below technical support at this week’s low of $84.55 and then at $83.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were a bit higher overnight. 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