Thursday, March 25–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with European shares mostly weaker and Asian shares mostly firmer. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. A feature in the market place this week has been an appreciating U.S. dollar on the foreign exchange market and a big drop in crude oil prices. These key “outside markets” today see the U.S. dollar index higher and hitting another four-month high overnight as the greenback bulls have restarted a price uptrend on the daily bar chart. The U.S. Treasury 10-year note yield is fetching 1.623% Wednesday morning. Rising bond yields in the U.S. that are outpacing government bond yields in other countries are inviting capital flows into the greenback, including from the Euro currency. The U.S. is beating the Euro zone on economic growth prospects and on the Covid-19 battle. Meantime, Nymex crude oil prices are lower today and trading around $60.00 a barrel. A giant container ship stuck in the Suez Canal is disrupting world shipping, including that of crude oil. One has to wonder if crude oil prices would be even lower this week had not the canal blockage occurred.
U.S. weekly jobless claims out today see analysts expecting 730,000 new filings and a drop in continuing claims, to 4 million.
One other thing the market will be keeping a close eye on Thursday is the auction of $62 billion in seven-year U.S. Treasury notes at midday. This auction comes after February’s Treasury note auction flop that prompted a big sell-off in U.S. Treasuries.
Other U.S. economic data due for release Thursday includes the third estimate of four-quarter 2020 GDP, and the Kansas City Fed manufacturing survey. Several Federal Reserve officials are also slated to give speeches today.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the solid overall near-term technical advantage. The 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 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 3,944.50 and then at the contract high of 3,978.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,875.00 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are firmer 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 early today. Shorter-term technical resistance is seen at 13,000.00 and then at this week’s high of 13,172.00. On the downside, shorter-term support is seen at the overnight low of 12,752.00 and then at last week’s low of 12,681.75. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading today. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 157 4/32 and then at 157 16/32. Shorter-term support lies at 156 even and then at 155 even. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: 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 above the 9-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 this week’s high of 132.09.0 and then at 132.16.0. Shorter-term technical support lies at 131.26.0 and then at 131.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are weaker and hit a 4.5-month low in early U.S. trading. Bears have the overall near-term technical advantage and have momentum. The shorter-term moving averages for the Euro 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 Euro are bearish early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.1873 and then at 1.1900. Shorter-term support is seen at the overnight low of 1.1820 and then at 1.1800. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
May Nymex crude oil prices are lower in early U.S. trading. Bulls have the overall near-term technical advantage but a price uptrend on the daily chart has been negated, to suggest a near-term market top is in place. The shorter-term moving averages are bearish early today as the 4-day is below the 9-day and 18-day. The 9-day is below 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 $61.00 and then at $62.00. Look for sell stops just below technical support at the overnight low of $59.65 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading. The higher U.S. dollar index this week keeping grain market bulls squelched. Grain traders await the very important USDA planting intentions and quarterly grains stocks reports next Wednesday. Trading is likely to remain quieter ahead of that data. Grain market bulls do still have the overall near-term technical advantage. Grain traders also need to keep an eye on crude oil prices. If crude continues to slide many raw commodity markets may do the same. On tap today is the weekly USDA export sales 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