Thursday, May 2–Jim Wyckoff’s morning markets report
The marketplace has mostly digested the Federal Reserve Open Market Committee (FOMC) meeting that Wednesday. The Fed left U.S. interest rates unchanged, as expected, but said there has been a “lack of further progress” in recent months toward its inflation target of 2% annually. The Fed said it is “strongly committed” to returning inflation to 2% and there will be no rate cuts until that time. Fed Chairman Powell in his press conference ruled out a rate hike coming soon. While the Fed leaned hawkish on U.S. monetary policy, there was nothing in the FOMC statement or Powell’s comments that surprised the marketplace. The marketplace seemingly breathed a sigh of relief the FOMC statement and Powell were not even more hawkish.
Friday morning comes the April U.S. jobs report from the Labor Department. The key non-farm jobs component of the jobs report is expected to show a rise of 240,000, following the March report showing a rise of 303,000. Wednesday’s ADP national employment report for April showed a rise of 192,000 jobs, compared to expectations for a rise of 183,000.
In overnight news, the Japanese yen rose against the U.S. dollar on likely more intervention from the Bank of Japan.
The OECD think tank raised its 2024 global economic growth projection to 3.1% from 2.9%.
The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil prices are higher and trading around $80.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.614%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, preliminary productivity and costs, manufacturers’ shipments and inventories, and the global manufacturing PMI.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. 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. 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 5,154.25 and then at 5,200.00. Support for active traders is seen at this week’s low of 5,037.75 and then at 5,000.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are 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 even with the 9-day. The 9-day is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Wednesday’s high of 17,793.25 and then at this week’s high of 17,949.00. On the downside, shorter-term support is seen at this week’s low of 17,399.25 and then at 17,300.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Prices are trending lower on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 115 6/32 and then at 116 5/32. Shorter-term support lies at this week’s low of 113 22/32 and then at 113 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly down in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 108.06.5 and then at 108.16.0. Shorter-term technical support is seen at 107.20.0 and then at this week’s low of 107.12.5. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are lower in early U.S. trading. The shorter-term moving averages for the Euro are bearish 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 neutral early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0775 and then at 1.0800. Shorter-term support is seen at 1.0700 and then at this week’s low of 1.0670. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are a bit higher in early U.S. trading. Prices hit a six-week low Wednesday. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $80.00 and then at $81.00. Look for sell stops just below technical support at this week’s low of $78.83 and then at $77.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were higher overnight, boosted by better risk sentiment in the marketplace after the Federal Reserve offered no hawkish surprises at the FOMC meeting this week. On tap today is the weekly USDA export sales report. Wheat and soybean meal prices are still trending higher.
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