Friday, April 8–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed but mostly higher overnight. The U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Risk aversion is less keen late this week. There are still major concerns about the Russia-Ukraine war, a more hawkish U.S. Federal Reserve, rising global inflation, and spreading Covid cases in China. However, from a markets perspective, there have been no major developments on those fronts late this week, which has allowed traders and investors to exhibit just a bit more risk appetite.
In overnight news, Russia’s central bank lowered its main interest rate from 20% to 17% in a sign Russia’s financial system has stabilized after being severely disrupted by the war and economic sanctions. The Russian ruble has also staged a recovery from its depths seen in the first couple weeks of the war.
Reports said JP Morgan has warned raw commodity prices could surge by another 40% if investors move their allocations into raw materials at a time of rising inflation. Problematic inflation has been historically bullish for commodity markets.
Nymex crude oil futures prices are firmer today and trading around $96.50 a barrel. The U.S. dollar index is near steady early today and hit a nearly two-year high overnight. The yield on the 10-year U.S. Treasury note is presently fetching 2.67%. Treasury yields have risen significantly this week.
U.S. economic data due for release Friday is light and includes the monthly wholesale trade report and the USDA monthly supply and demand report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls have faded this week. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below 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 Wednesday’s high of 4,528.75 and then at this week’s high of 4,588.75. Support for active traders is seen at this week’s low of 4,444.50 and then at 4,400.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index 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 Wednesday’s high of 14,861.25 and then at 15,000.00. On the downside, shorter-term support is seen at this week’s low of 14,317.00 and then at 14,200.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading and hit another contract low. Bears are in solid technical command. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-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 145 even and then at Thursday’s high of 146 4/32. Shorter-term support lies at the overnight contract low of 143 25/32 and then at 143 even. Wyckoff’s Intra-Day Market Rating: 3.5
June U.S. T-Notes: Prices are lower in early U.S. trading and hit another contract low. Bears are in solid near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 120.23.0 and then at 121.00.0. Shorter-term technical support lies at 120.00.0 and then at 119.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The June Euro currency futures are slightly down in early U.S. trading and hit a four-week low. Bears have the solid overall 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. 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 Wednesday’s high of 1.0966 and then at Tuesday’s high of 1.1017. Shorter-term support is seen at the overnight low of 1.0874 and then at the March low of 1.0845. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at Thursday’s high of $98.82 and then at $100.00. Look for sell stops just below technical support at this week’s low of $93.81 and then at the March low of $92.20. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures prices were mixed in early U.S. pre-market trading. Not much new this week. Corn and soybean bulls have the overall near-term technical advantage. Wheat bulls and bears are on a level technical playing field. Focus of grain traders will continue on the key outside markets (crude oil, U.S. dollar index and U.S. stock indexes), but is also shifting to U.S. weather patterns as corn and soybean planting season is not far off. It looks to be a wetter early season for corn planting and that’s bullish for corn. On tap today is the monthly USDA supply and demand report.
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