Wednesday, April 29–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading, while the U.S. stock indexes are pointed toward higher openings when the New York day session begins. It’s a big day for U.S. economic data Wednesday, as the Federal Reserve’s Open Market Committee (FOMC) concludes its two-day meeting in the afternoon with a statement on U.S. monetary policy. No changes are expected but traders will parse the statement as well as Fed Chairman Jerome Powell’s virtual press conference. Powell is expected to say the Fed “will do what it takes” to get the U.S. economy back on track. Also, the advance estimate for first-quarter U.S. gross domestic product is out and is expected to show economic growth of around -4.0%. That’s a bad number but most agree the figure for the second quarter will be much worse.
In overnight news, a Hong Kong economic official said that city-state’s economy will contract between 4-7% in 2020. Reports said mainland China will hold its annual people’s conference later in May, as a show of how that country is emerging quickly from the effects of the Covid-19 pandemic. That major conference was postponed earlier this year.
The important outside markets see Nymex crude oil sharply higher and trading around $14.25 a barrel. There is talk Nymex crude prices will again fall into negative territory when the June contract nears expiration in late May. The U.S. dollar index is weaker again today. The greenback bulls are fading this week, partly on notions other major countries’ economies are coming back to life faster than that of the U.S. The 10-year U.S. Treasury note yield is trading around 0.59% this morning—down from levels seen earlier this week.
Other U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the consumer price index, pending home sales, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the near-term technical advantage as prices are 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 to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 2,913.50 and then at 2,950.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 2,860.75 and then at this week’s low of 2,812.75. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. A price uptrend is 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 8,859.75 and then at the April high of 8,966.75. On the downside, short-term support is seen at the overnight low of 8,733.75 and then at this week’s low of 8,654.50. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the firm 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 bullish early today. Shorter-term technical resistance is seen at the April high of 183 1/32 and then at 184 even. Shorter-term support lies at the overnight low of 181 23/32 and then at 181 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 139.07.0 and then at 139.16.0. Shorter-term technical support lies at the overnight low of 138.30.0 and then at 138.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is modestly lower in early U.S. trading. Bulls have the overall near-term technical advantage but are fading. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-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 100.000 and then at Tuesday’s high of 100.295. Shorter-term support is seen at this week’s low of 99.485 and then at 99.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are sharply higher in early U.S. trading, on short covering and bargain hunting. The bears still have the solid overall near-term technical advantage. The shorter-term moving averages are bearish early today as the 4-day is below the 18-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $14.49 and then at $15.00. Look for sell stops just below technical support at the overnight low of $12.67 and then at $12.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
US grain futures are mixed in early US pre-market trading, with corn and beans near steady and wheat steady to lower. Grain market bulls are in serious trouble, including wheat now. Expect more downside in the grains in the near term, amid global demand worries and with raw commodity sector leader crude oil prices trading in the low teens.
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