Friday, April 22–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down overnight. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Risk appetite remains tepid at best late this week. Stock traders were reminded Thursday afternoon that the U.S. central bank is on an aggressive monetary policy tightening path in order to put the brakes on problematic price inflation. U.S. Treasury yields surged and stocks slid after Federal Reserve Chair Jerome Powell on Thursday afternoon reiterated a bias for aggressive U.S. interest rate hikes. Traders and investors are now expecting 50 basis-point increases at the FOMC meetings in May, June and maybe July. Powell detailed his most aggressive approach to taming inflation to date. Meantime markets are factoring in a 25 basis-point rise in European Central bank interest rates in both July and September. A Barron’s headline today reads: “Powell the hawk may send stocks further south.”
Nymex crude oil futures prices are lower today and trading around $102.25 a barrel. The U.S. dollar index is higher early today. The yield on the 10-year U.S. Treasury note is presently fetching 2.945%.
U.S. economic data due for release Friday includes the U.S. flash services and manufacturing purchasing managers indexes. More IMF and World Bank meetings are taking place in Washington, D.C.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. 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 bearish early today. Today, shorter-term technical resistance comes in at 4,400.00 and then at 4,450.00. Support for active traders is seen at the April low of 4,355.50 and then at 4,300.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower and hit a five-week low in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 13,800.00 and then at 14,000.00. On the downside, shorter-term support is seen at the overnight low of 13,612.25 and then at 13,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears are in strong technical command. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 this week’s high of 141 13/32 and then at 142 even. Shorter-term support lies at 139 even and then at the contract low of 138 14/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower and hit a contract low in early U.S. trading. Bears are in strong near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 118.28.0 and then at 119.00.0. Shorter-term technical support lies at the overnight contract low of 118.08.0 and then at 118.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage. 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 neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0873 and then at this week’s high of 1.0958. Shorter-term support is seen at the overnight low of 1.0812 and then at the April low of 1.0781. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $104.22 and then at $105.00. Look for sell stops just below technical support at $100.00 and then at $99.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were mostly a bit firmer in early U.S. pre-market trading. Corn and soybean bulls have the solid overall near-term technical advantage. Wheat bulls are fading. If wheat futures continue to sag then the upside will also be limited in corn and soybeans. Wheat may be the most important grain market to watch in the coming sessions.
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