Monday, April 26–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Traders and investors are weighing the bullish aspect of strengthening global economies that are emerging from the pandemic, but also the bearish aspect of the virus that is still raging in some regions of the global, including a major crisis in India. Also somewhat denting investor enthusiasm is a move by the Biden administration to raise taxes.
The main economic event of the week will be the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Powell. While no change in U.S. monetary policy is expected, the marketplace will closely scrutinize the Fed’s inflation outlook and any comments on the future path of monetary policy.
The key outside markets today see the U.S. dollar index lower amid a near-term price downtrend in place. Nymex crude oil prices are modestly lower and trading around $61.15 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.57%. For perspective, the German 10-year bond (bund) is presently yielding -0.256% and the U.K. 10-year bond (gilt) is fetching 0.753%.
U.S. economic data due for release Monday includes durable goods orders and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. Bulls still have the solid overall near-term technical advantage. 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 the record high of 4,186.75 and then at 4,200.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 4,130.00 and then at last week’s low of 4,110.50. Sell stops likely reside below those levels. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are a bit weaker in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Friday’s high of 13,981.00 and then at the contract high of 14,059.50. Buy stops likely reside just above those levels. On the downside, shorter-term support is seen at 13,800.00 and then at last week’s low of 13,700.50. Sell stops likely reside just below those levels. 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 today. Bears have the overall near-term technical advantage. However, recent sideways-to-higher price action at lower levels may be “basing” that puts in a market bottom. Prices are also in an uptrend on the daily chart. 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 158 17/32 and then at the April high of 159 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at 157 16/32 and then at 157 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 132.15.0 and then at 132.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.07.5 and then at 132.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are near steady in early U.S. trading and hit a seven-week high overnight. The shorter-term moving averages for the Euro 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 Euro are neutral today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2129 and then at 1.2150. Buy stops likely reside just above those levels. Shorter-term support is seen at 1.2050 and then at 1.2000. Sell stops likely reside just below those levels. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are lower in early U.S. trading. Bulls still have the overall near-term technical advantage but trading has turned sideways and choppy. 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 bearish early today. Look for buy stops to reside just above technical resistance at $62.00 and then at the overnight high of $62.31. Look for sell stops just below technical support at last week’s low of $60.61 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are higher to sharply up in early U.S. pre-market trading, with corn leading gainers and setting multi-year highs. The grain markets are going “parabolic”—meaning nearly straight up. History suggests such price moves mean market tops are getting closer. China demand rumors, recent cold weather in the U.S. midsection and a bullish global supply and demand balance are fueling the grain market bulls. On tap today is the weekly USDA export inspections report.
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