Wednesday, April 24–Jim Wyckoff’s Morning Markets Report
Asian stock indexes were mostly weaker overnight, while the European equities markets traded near steady. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The U.S. stock indexes are trending solidly higher and are at or near record and/or multi-month highs. With no major geopolitical hotspots in play at present, focus of traders and investors is on corporate earnings reports, most of which have been upbeat.
In overnight news, the closely watched German Ifo business sentiment index fell in April to 99.2 versus 99.7 in March.
It’s quieter this week on the U.S.-China trade war front. Both sides are set to meet again next week. The U.S. is also discussing trade with Japan and other nations. The European Central Bank today declared the U.S. could be the main victim on trade because of its more aggressive stance toward its major trading partners.
Nymex crude prices on Tuesday pushed to a six-month high of $66.60 a barrel, with Brent crude trading above $74.00. Prices are modestly lower today on some profit taking. The other key outside market today finds the U.S. dollar index near steady and not far below this week’s multi-month high.
U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–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 six-month high on Tuesday. 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 to bullish early today. Today, shorter-term technical resistance comes in at the September high of 2,961.25 and then at 2,975.00. Buy stops likely reside just above those levels. Downside support for active traders today is located Tuesday’s low of 2,908.00 and then at last week’s low of 2,889.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are near steady in early U.S. trading after hitting a contract high Tuesday. 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 neutral to bullish early today. Shorter-term technical resistance is seen at Tuesday’s contract high of 7,843.75 and then at 7,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,800.00 and then at Tuesday’s low of 7,724.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading on short covering. A downtrend is still in place on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below with 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 147 5/32 and then at 147 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 146 14/32 and then at last week’s low of 145 31/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are slightly higher in early U.S. trading. A price downtrend is still in place on the daily bar chart but now just barely. 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 the overnight high of 123.14.0 and then at 123.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.03.5 and then at 123.00.0. 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 slightly up early today and near Tuesday’s multi-month high. Bulls 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 neutral to bullish early today. The dollar index finds shorter-term technical resistance at Tuesday’s contract high of 97.460 and then at 97.750. Shorter-term support is seen at this week’s low of 96.920 and then at 96.620. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker on profit taking after hitting a six-month high on Tuesday. Bulls have the solid near-term technical advantage and are keeping a gentle uptrend in place on the daily bar chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 Tuesday’s high of $66.60 and then at $67.00. Look for sell stops just below technical support at $65.50 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were narrowly mixed overnight and are near their lows for this year. Grain market bears have the solid overall near-term technical advantage. There are no early clues that market bottoms are close at hand. Focus is on U.S. Corn Belt weather, which now favors the bears as field work is taking place in the region.
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