April 20, 2017
OVERNIGHT DEVELOPMENTS
European and Asian stock markets were mostly slightly higher Thursday. Crude oil’s solid losses on Wednesday did give equities traders pause, but oil prices have rebounded a bit Thursday morning. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
Gold prices are weaker Thursday morning as the market is experiencing a normal downside technical correction after scoring a five-month high earlier this week.
The world marketplace is still very aware of geopolitical tensions between the U.S. and North Korea, and the U.S. and Russia. U.S. Secretary of State Rex Tillerson on Wednesday afternoon took a very hard line on Iran, too. Tillerson said the days of a passive U.S. stance against regimes like Iran and North Korea are over.
The first round of the French presidential elections will be held this Sunday. The second round will be on May 7. European market watchers are getting more nervous as the French elections approach and polls show tight races. The very existence of the European Union could hinge upon elections in the European Union this year.
In overnight news, the Euro zone reported its construction rose by 6.9% in February from January and was up 7.1%, year-on-year. Those were the largest numbers in five years.
The key outside markets on Thursday morning see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are also modestly up following the strong selling pressure seen Wednesday, on ideas of rising U.S. crude oil production levels.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey and leading economic indicators.
–Jim
U.S. STOCK INDEXES
S&P 500 June e-mini futures: Prices are higher in early U.S. trading. The bulls still have the overall near-term technical advantage. However, prices are in a gentle six-week-old downtrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 2,347.00 and then at 2,356.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,332.50 and then at this week’s low of 2,322.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index June futures: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 5,430.75 and then at 5,443.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 5,394.50 and then at 5,375.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower on a corrective pullback after hitting a five-month high on Tuesday. Bulls still have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 154 31/32 and then at this week’s high of 155 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at 154 even and then at this week’s low of 153 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower on a downside correction after hitting a five-month high Tuesday. Bulls still have the overall near-term technical advantage. 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 early today. Shorter-term resistance lies at the overnight high of 126.11.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.00.0 and then at this week’s low of 125.26.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is modestly lower in early U.S. trading and hit a three-week low overnight. Bulls and bears are on a level overall near-term technical playing field. The shorter-term moving averages for the dollar index are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 99.760 and then at 100.000. Shorter-term support is seen at the overnight low of 99.290 and then at 99.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are higher in early U.S. trading, on a corrective bounce from the strong selling pressure seen Wednesday. Bulls have lost their overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $51.50 and then at $52.00. Look for sell stops just below technical support at the overnight low of $50.51 and then at this week’s low of $50.09. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures markets were firmer overnight, on short covering. Traders will closely examine this morning’s weekly USDA export sales report. Grain market bears still have the overall near-term technical advantage. However, it is still my bias the grains do not have much downside potential after the recent selling pressure and heading into the more price-volatile U.S. planting and growing season.