Tuesday, April 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. More and more it appears North America and Europe have “turned the corner” on the Covid-19 pandemic. New York Governor Cuomo said Monday his state has seen the worst of the pandemic. Other hotspots in the U.S. have also showed signs of simmering down. Leading U.S. health officials are now saying the world’s largest economy can very likely begin to reopen in stages beginning in May.
Major corporate earnings reports are now starting to be released, which will show the early impact of the Covid-19 pandemic, and be a sobering reminder of the tough economic times at present.
In overnight news, China, the world’s second-largest economy, saw its March exports down 6.6%, year-on-year, which was less than expected. Imports were down 0.9% in the period, also way less than expected. China watchers deemed this data as upbeat, showing the Chinese economy is recovering from the pandemic.
The important markets today see Nymex crude oil prices trading lower, around $22.00 a barrel. Oil market bulls are sorely disappointed the weekend OPEC and other major oil producers agreement to restrict oil output did not boost crude oil futures prices. However, there is no consensus on how much oil production will be reduced. Some market watchers think 10 million barrels a day and the more optimistic bulls think 20 million. There is more agreement among analysts that worldwide oil demand has dropped by at least 20 million barrels a day.
Meantime, the U.S. dollar index is weaker again this morning. The 10-year U.S. Treasury note yield is trading around 0.75% this morning. Gold prices overnight hit a 7.5-year high of $1,785.00 an ounce.
U.S. economic reports due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and import and export prices. A few Federal Reserve officials are slated to give speeches today.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Prices are in a near-term uptrend on the daily chart, which suggests a near-term market bottom is in place. 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 Monday’s high of 2,819.50 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at Monday’s low of 2,711.00 and then at 2,700.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are solidly higher and hit a four-week high in early U.S. trading. Recent gains suggest a market bottom is in place, including a price uptrend in place on the daily 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 8,488.00 and then at 8,600.00. On the downside, short-term support is seen at the overnight low of 8,319.00 and then at 8,200.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 Monday’s high of 179 2/32 and then at 180 even. Shorter-term support lies at the overnight low of 177 14/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 resistance lies at Monday’s high of 138.11.0 and then at 138.16.0. Shorter-term technical support lies at the overnight low of 137.27.0 and then at last week’s low of 137.16.0. 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 lower in early U.S. trading. Bulls still have the slight near-term technical advantage but are fading. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at Monday’s high of 99.640 and then at 100.000. Shorter-term support is seen at Monday’s low of 99.110 and then at 99.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are lower in early U.S. trading. The bears have the solid overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below the 18-day and 18-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 the overnight high of $23.08 and then at $24.00. Look for sell stops just below technical support at the overnight low of $21.67 and then at $21.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are mostly weaker in early US pre-market trading. While U.S. and global stock markets have stabilized, which has been good for the grain market bulls, crippled global economies and supply chains remain a major bearish element for the grain markets. Technically, wheat bulls have the overall near-term technical advantage, with soybeans and corn bears in technical control.
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