Wednesday, May 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
The key U.S. markets event Wednesday will be the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends Wednesday afternoon with a statement. No change in U.S. interest rates is expected at this meeting. Focus will be on inflation prospects and what the FOMC members have to say on that matter.
Another important U.S. data point today will be the release of the ADP national employment report for April, which is expected to show a rise of 190,000 jobs.
A U.S. high-level trade delegation travels to China Thursday to try to avert a trade war between the world’s two largest economies.
On Friday is the U.S. employment report from the Labor Department—arguably the most important U.S. data point of the month.
The outside markets today see the U.S. dollar index slightly lower on a corrective pullback after hitting a 4.5-month high on Tuesday. Meantime, Nymex crude oil prices are slightly up and trading around $67.50 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the ISM New York report on business, the global manufacturing PMI, 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. The bulls and bears are on a level overall near-term technical playing field amid choppy trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 2,682.25 and then at last week’s high of 2,688.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,623.25 and then at last week’s low of 2,611.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index December futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above with the 9-day. The 9-day average is below 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 6,740.00 and then at last week’s high of 6,772.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,650.00 and then at 6,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower in early U.S. trading. 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 early today. Shorter-term technical resistance is seen at the overnight high of 143 13/32 and then at this week’s high of 143 28/32. Buy stops likely reside just above those levels. Shorter-term support lies at 142 16/32 and then at 142 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker in early U.S. trading today. 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 early today. Shorter-term resistance lies at the overnight high of 119.15.5 and then at this week’s high of 119.21.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.08.0 and then at the contract low of 118.31.0. 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 in early U.S. trading today, on mild profit taking after hitting a four-month high on Tuesday. 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 this week’s high of 92.370 and then at 92.500. Shorter-term support is seen at 92.000 and then at Tuesday’s low of 91.595. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly up in early U.S. trading. Bulls are still in firm near-term technical control. Look for buy stops to reside just above technical resistance at $68.00 and then at Tuesday’s high of $68.90. Look for sell stops just below technical support at this week’s low of $66.85 and then at $66.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were weaker overnight, on profit-taking from recent good gains. Speculative traders are taking more interest in the long side of the grains, including the big “funds.” Grain market bulls still have the overall near-term technical advantage.