Friday, April 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Strong corporate earnings reports coming out of the U.S. late this week are helping the stock market bulls. A decline in government bond yields late this week is also a bullish development for equities.
In overnight news, a meeting between North Korean and South Korean officials, including North Korea’s Kim Jong Un and South Korean President Moon Jae-in made dramatic progress, with a peace treaty signed declaring the end of the Korean War that was fought 65 years ago. This shocking development has many wondering if Kim Jong Un is sincere.
The U.K.’s gross domestic product grew only 0.1% in the first quarter, which is the slowest growth rate for the country in five years.
The highlight of the U.S. economic data points this week will be today’s advance first-quarter GDP report, which is expected to show a rise of 1.8% versus up 2.9% in the fourth quarter of last year.
The key “outside markets” on Friday morning see the U.S. dollar index trading higher and hitting another 3.5-month high overnight. Meantime, Nymex crude oil prices are weaker and trading just below $68.00 a barrel.
U.S. economic data due for release Friday includes the employment cost index, the advance first-quarter GDP estimate, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading. The bulls and bears are on a level overall near-term technical playing field. 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 neutral early today. Today, shorter-term technical resistance comes in at Thursday’s high of 2,677.50 and then at this week’s high of 2,688.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,665.25 and then at 2,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index December futures: Prices are slightly higher in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 6,775.00 and then at 6,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,731.00 and then at 6,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer on more short covering after hitting a two-month low Wednesday. Bear still have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 bullish early today. Shorter-term technical resistance is seen at 143 even and then at this week’s high of 143 9/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 142 16/32 and then at 142 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer on more short covering after hitting a contract and multi-year low on Wednesday. Shorter-term moving averages (4- 9- 18-day) are still 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 bullish early today. Shorter-term resistance lies at this week’s high of 119.16.0 and then at 119.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 119.08.0 and then at the contract low of 118.31.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is higher and hit another 3.5-month high overnight. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above 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 91.700 and then at 92.000. Shorter-term support is seen at the overnight low of 91.300 and then at 91.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly lower in early U.S. trading. Bulls are still in solid near-term technical control. Look for buy stops to reside just above technical resistance at $69.00 and then at the April high of $69.55. Look for sell stops just below technical support at $67.50 and then at this week’s low of $67.11. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were mixed overnight. Farmers are in their fields at full speed late this week, planting corn and preparing for soybean planting. World supply-and-demand fundamentals favor the bulls for soybeans and corn, but favor the bears for wheat.