Friday, April 19–Jim Wyckoff’s morning markets report
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed to toward weaker openings when the New York day session begins.
After an initial overnight knee-jerk, the markets are not reacting strongly to an overnight Israeli retaliatory air strike on a major Iranian city, which apparently produced little damage. Military and geopolitical analysts are saying Israel’s military action overnight was limited and meant to show Iran that Israel has the capability to do a major, devastating strike on Iran if it wants to do so. Meantime, Iran appears to be, at least initially, downplaying the event as minor. Many analysts see the overnight event as possibly being the beginning of a de-escalation of Israel-Iran tensions. However, there are still major unknowns, such as how Iran will respond, or if Israel will strike Iran again. The U.S. military was not involved in the overnight Israeli air strikes.
Gold prices are trading a bit weaker early today, after a brief overnight spike on the Israeli air strike on Iran. Longtime gold market watchers have noticed that there has been much stronger demand for gold coming out of China recently, as evidenced by huge trading volumes in gold futures on the Chinese futures exchanges.
There is no major U.S. economic data due for release Friday.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading after hitting a 2.5-month low overnight. Bulls still have the overall near-term technical advantage but have faded badly, 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at Thursday’s high of 5,095.25 and then at 5,023.25. Support for active traders is seen at 5,000.00 and then at the overnight low of 4,963.50. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading after hitting a three-month low overnight. Bulls have the overall near-term technical advantage but are fading badly, 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 bearish early today. Shorter-term technical resistance is seen at Thursday’s high of 17,770.75 and then at 18,000.00. On the downside, shorter-term support is seen at 17,300.00 and then at overnight low of 17,181.75. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 116 5/32 and then at 117 even. Shorter-term support lies at the overnight low of 114 9/32 and then at this week’s low of 113 10/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are up 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 bullish early today. Shorter-term resistance lies at the overnight high of 108.22.5 and then at 109.00.0. Shorter-term technical support is seen at the overnight low of 107.24.5 and then at this week’s low of 107.13.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are slightly firmer on short covering after hitting a 5.5-month low Tuesday. 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 early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0715 and then at 1.0758. Shorter-term support is seen at this week’s low of 1.0628 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
May Nymex crude oil prices are lower in early U.S. trading. Bulls are fading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is even with 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 $83.00 and then at $84.00. Look for sell stops just below technical support at this week’s low of $81.56 and then at $80.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were firmer 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