Thursday, April 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. Asian stocks were mostly down and European stock indexes were mostly up. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Amid the Covid-19-induced gloom that is pervasive worldwide, there are some positives this week. There are early signs the U.S. and Europe have seen the curve flatten on the rate of new infections. U.S. government and health officials are saying hospitals are keeping up with the influx of coronavirus patients.
The key U.S. data point today will be the weekly jobless claims report, which is expected to show around 5 million new claims in the latest week. The Covid-19 pandemic that has mostly shuttered the U.S. economy has seen around 20 million American workers lose their jobs up to this point. Just recently, U.S. economic data covering the past few weeks is showing just how much damage has been inflicted on U.S. businesses. U.S. retail sales in March were down over
8 percent, it was reported Wednesday.
In another potentially ominous development for North America, reports say Chinese consumers coming out of the coronavirus lockdown that lasted several weeks are not in a spending mood. This contradicts notions that once the lockdowns are lifted, holed-up North American consumers will coming out swinging regarding spending at retail outlets.
The important outside markets today see crude oil prices modestly up and trading around $20.25 a barrel after hitting an 18.5-year low on Wednesday. The U.S. dollar index is higher again this morning on a corrective rebound from recent selling pressure. The 10-year U.S. Treasury note yield is trading around 0.64% this morning, down from recent higher levels. The falling U.S. Treasury yields are a worrisome sign of the major headwinds that have and will likely continue to buffet the U.S. economy in the coming months.
Other U.S. economic reports due for release Thursday include the Philadelphia Fed business survey and new residential construction.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Prices are still in a near-term uptrend on the daily chart. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-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 this week’s high of 2,846.00 and then at 2,875.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 2,746.00 and then at this week’s low of 2,711.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. A price uptrend is still in place on the daily chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-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 this week’s high of 8,710.00 and then at 8,800.00. On the downside, short-term support is seen at 8,600.00 and then at the overnight low of 8,500.50. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 this week’s high of 181 even and then at 182 even. Shorter-term support lies at 180 even and then at 179 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 139.09.0 and then at 139.16.0. Shorter-term technical support lies at the overnight low of 138.30.5 and then at 138.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is higher in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 100.085 and then at 100.345. Shorter-term support is seen at 99.500 and then at 99.250. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
May Nymex crude oil prices are firmer in early U.S. trading. The bears have the solid overall near-term technical advantage to suggest more downside in the near term. The shorter-term moving averages are neutral early today as the 4-day is below the 18-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $21.00 and then at $22.00. Look for sell stops just below technical support at this week’s low of $19.20 and then at $19.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
US grain futures are mostly firmer in early US pre-market trading, on tepid short covering. Crude oil dropping to an 18.5-year low this week is a bearish omen for the grains. While U.S. and global stock markets have stabilized, crippled global economies remain a major bearish element for the grain markets. Don’t look for fresh price uptrends to develop any time soon. Technically, wheat bulls still have the overall near-term technical advantage, with soybeans and corn bears 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