Wednesday, April 10–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed in uneventful trading overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.
Traders and investors in stocks and stock indexes are not quite as upbeat at mid-week. President Trump on Monday threatened the European Union with $11 billion in tariffs on EU imports of several products into the U.S. Meantime, the U.S. is still fighting a trade war with China, and an escalation in trade tensions with the EU would mean the world’s three largest economies are sanctioning each other.
The International Monetary Fund on Tuesday forecast slowing global growth, at 3.3% in 2019 versus its last forecast of 3.5% growth, mainly due to the U.S. battling other economies over trade issues.
On the Brexit front, European Union officials will meet today to discuss extending a window for the U.K. to leave the bloc. If no extension is granted by the EU, then this Friday the U.K. would see a “hard exit,” which could roil European stock and financial markets.
The key U.S. data points today are the consumer price index for March, which is expected to be up 0.3% from February and up 1.8%, year-on-year. That morning report will be followed by the afternoon release of the minutes of the last Federal Open Market Committee meeting.
The European Central Bank also holds its regular monetary policy meeting Wednesday.
The key outside markets today find the U.S. dollar index weaker as prices this week are seeing a corrective pullback from recent gains. Meantime, Nymex crude oil prices are higher, near Tuesday’s five-month high and trading around $64.50 a barrel.
Other U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, real earnings, the weekly DOE liquid energy stocks report, and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading today, and near the six-month high scored Tuesday. Bulls have the firm near-term technical advantage amid a price uptrend on the daily chart. 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 this week’s high of 2,900.00 and then at 2,915.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,877.25 and then at 2,860.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are firmer in early U.S. trading and near Tuesday’s six-month high. Bulls have the firm 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 early today. Shorter-term technical resistance is seen at this week’s high of 7,633.75 and then at 7,650.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 7,561.25 and then at 7,522.00. 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 weaker early today. Bulls still have the overall near-term technical advantage amid choppy 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 148 9/32 and then at 148 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 147 16/32 and then at last week’s low of 147 1/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage amid choppy trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 123.24.5 and then at 123.27.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 123.13.0 and then at last week’s low of 123.08.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower again today as the index sees a corrective pullback this week. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.695 and then at this week’s high of 97.020. Shorter-term support is seen at this week’s low of 96.460 and then at 96.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are firmer and not far below Tuesday’s five-month high. Bulls have the firm 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $64.79 and then at $65.00. Look for sell stops just below technical support at $64.00 and then at this week’s low of $63.13. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were again mixed overnight. Bears have the overall near-term technical advantage in the grains. It’s very likely going to take a weather market in the Corn Belt in the coming few months to jumpstart any rallies in the grain markets.
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