Tuesday, April 12–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. On the Russia invasion of Ukraine front, the U.S. has now warned the war will take a more protracted and bloodier turn. Reports said European countries are now focusing more on arming the Ukrainians and less on adding economic sanctions on Russia.
Inflation worries remain near the front burner of the marketplace. The U.S. data point of the week comes this morning with the consumer price index report for March, which is expected to come in hot at up 8.4%, year-on-year. And on Wednesday comes the U.S. producer price index report for March.
The Covid pandemic continues to surge in China, the world’s second-largest economy. Broker SP Angel said today in an email dispatch: “Strict Shanghai lockdown has put other Chinese cities on edge. All residents in Shanghai have been in a strict lockdown since last Tuesday as Covid cases surge and the government doubles down on its ‘zero covid’ strategy. Residents have been left without food or medicine, leading to protests and general unrest. Shanghai is the most populous city in China and thought to contribute 3.5% of the country’s total GDP. It is thought that now over 70 of China’s largest 100 cities are suffering some sort of lockdown. Panic buying is sweeping through cities, with officials in the southern port city of Guangzhou urging residents to stop excess purchasing as a local paper suggested shortages were imminent.”
Nymex crude oil futures prices are solidly higher today and trading around $98.00 a barrel. The U.S. dollar index is firmer early today and hit another two-year high overnight. The yield on the 10-year U.S. Treasury note is presently fetching 2.792% and at a more-than-three-year high.
Other U.S. economic data due for release Tuesday includes the NFIB small business index, real earnings, the Johnson Redbook and chain store weekly reports, the IBD/TIPP economic optimism index, and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up in early U.S. trading after hitting a three-week low overnight. The shorter-term moving averages (4-, 9- 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 Monday’s high of 4,491.25 and then at 4,550.00. Support for active traders is seen at the overnight low of 4,382.25 and then at 4,350.00. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are slightly up but hit a three-week low in overnight trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Monday’s high of 14,382.00 and then at 14,500.00. On the downside, shorter-term support is seen at the overnight low of 13,902.75 and then at 13,750.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading and hit another contract low. Bears are in strong 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 Monday’s high of 143 8/32 and then at 144 even. Shorter-term support lies at the overnight contract low of 141 6/32 and then at 141 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading and hit another contract low. Bears are in strong 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 Monday’s high of 120.03.0 and then at 120.10.0. Shorter-term technical support lies at the overnight contract low of 119.10.5 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. 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 Monday’s high of 1.0959 and then at 1.1017. Shorter-term support is seen at last week’s low of 1.0863 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 solidly higher 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 bullish early today. Look for buy stops to reside just above technical resistance at $99.00 and then at $100.00. Look for sell stops just below technical support at the overnight low of $94.84 and then at last week’s low of $93.81. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures prices were solidly higher in early U.S. pre-market trading. Sharply higher crude oil prices are helping to boost the grains. Corn and soybean bulls have the firm overall near-term technical advantage. Wheat bulls have also now gained the technical edge. Focus is 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.
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