Tuesday, April 30–Jim Wyckoff’s Morning Markets Report
Asian and European stock indexes were mixed in more subdued trading overnight. U.S. stock indexes are pointed toward steady to slightly lower openings when the New York day session begins. The U.S. stock indexes are near record or multi-month highs amid solid near-term price uptrends being in place.
In overnight news, the Euro zone reported its gross domestic product growth for the first quarter at 1.5%, year-on-year, which is better than the 0.9% growth rate seen in the fourth quarter and better than forecast. The Euro zone also reported its jobless rate at the lowest level in over 10 years.
The U.S. economic data pace picks up starting today, including the Federal Open Market Committee (FOMC) meeting that begins this morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. No change in U.S. monetary policy is expected at this meeting.
U.S.-China trade talks resume today, with U.S. officials in Beijing. U.S. Treasury Secretary Mnuchin said in an interview late Monday that the talks are near conclusion and could wrap up next week. He added there remains some work to do on the matter, however. Most of the marketplace is fairly optimistic the U.S. and China will reach a trade deal in the coming weeks.
The key “outside markets” today see the U.S. dollar index down on profit taking after hitting a two-year high last Friday. Meantime, Nymex crude oil prices are higher and trading around $64.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the employment cost index, the S&P-Cash-Shiller home price index, the ISM Chicago business survey, the consumer confidence index, and pending home sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading today after hitting a nearly seven-month high on Monday. Bulls have the solid near-term technical advantage amid a price uptrend on the daily chart and no early clues that a market top is close at hand. 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 early today. Today, shorter-term technical resistance comes in at Monday’s high of 2,951.50 and then at the September high of 2,961.25. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,925.00 and then at 2,915.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices last week hit a contract high. Bulls have the solid overall near-term technical advantage amid a price uptrend on the daily bar 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 bearish early today. Shorter-term technical resistance is seen at 7,850.00 and then at last week’s contract high of 7,879.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,755.50 and then at 7,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly higher 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 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 147 16/32 and then at last week’s high of 147 26/32. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 146 27/32 and then at 146 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly up in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 19-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at last week’s high of 123.24.0 and then at 123.29.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.09.0 and then at 123.03.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is lower early today on profit taking after prices Friday hit a two-year high. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above 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 97.625 and then at Monday’s high of 97.840. Shorter-term support is seen at the overnight low of 97.295 and then at 97.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher in early U.S. trading as bulls recover from sharp losses late last week. Bulls still have the overall near-term technical advantage and are trying to keep a gentle uptrend in place on the daily bar chart that is still in jeopardy. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $65.00 and then at $66.00. Look for sell stops just below technical support at the overnight low of $63.30 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed again overnight. Grain market bears have the firm overall near-term technical advantage. Focus is still on U.S. Corn Belt weather, which now favors the bulls as some wet weekend weather and rains in the extended forecasts are prompting some planting-delay concerns. Traders will also closely monitor progress on the U.S.-China trade talks this week.
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