Thursday, April 11–Jim Wyckoff’s morning markets report
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to toward lower openings when the New York day session begins, on follow-through selling from Wednesday’s solid losses following a hotter U.S. consumer price index report Wednesday morning that threw into further question whether the Federal Reserve will be able to cut interest rates this year. On tap today is the producer price index report for March, seen coming in at up 0.3% from February and compares to a 0.6% rise in the February report.
The European central bank is meeting on its monetary policy and will soon announce its results.
China got some inflation data Thursday that highlighted its deflationary price pressures. Its CPI in March was up 0.1% versus up 0.7% in February and a 0.4% rise that was expected. China’s PPI was reported down 2.8% in March versus down 2.7% February and a 2.8 decline that was forecast. All of those figures were year-on-year. These figures are likely to see Chinese monetary and fiscal authorities step up their economic stimulus measures.
In other news, Bloomberg reported its sources are saying Iran or its proxies could launch a retaliatory military strike against Israel in the coming days, after an Israeli air strike killed some top Iranian military officials in Syria a couple weeks ago.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the PPI report, and monthly U.S. chain store sales.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading after hitting a three-week low Wednesday. Bulls 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 5,225.00 and then at 5,250.00. Support for active traders is seen at this week’s low of 5,176.50 and then at 5,150.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are a bit lower in early U.S. trading. Bulls 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 bearish early today. Shorter-term technical resistance is seen at 18,300.00 and then at this week’s high of 18,474.25. On the downside, shorter-term support is seen at this week’s low of 18,053.50 and then at 17,900.00. 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, on tepid short covering after hitting a four-month low Wednesday. 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 bearish early today. Shorter-term technical resistance is seen at 116 16/32 and then at 117 even. Shorter-term support lies at the overnight low of 115 9/32 and then at 115 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly higher in early U.S. trading and hit a five-month low overnight. 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 108.16.0 and then at 109.00.0. Shorter-term technical support is seen at the overnight low of 108.04.5 and then at 108.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are slightly lower in early U.S. trading and hit a nearly two-month low. 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 1.0800 and then at 1.0850. Shorter-term support is seen at 1.0750 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 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: 4.5
GRAINS
Grain futures prices were mixed overnight. On tap today is the weekly USDA export sales report. Traders are also awaiting Thursday morning’s monthly USDA supply and demand report. Charts remain overall bearish for corn, wheat, 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