Thursday, April 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following Wednesday’s sharp losses.
The big U.S. data point this week will not be Friday’s monthly employment report (usually the most important data point of the month) but instead Thursday morning’s weekly jobless claims report. It is expected the weekly U.S. jobless claims will rise by over 3 million, after rising 3.2 million last week, as the U.S. economy has been severely crippled by the coronavirus outbreak.
The important outside markets today see Nymex crude oil prices sharply higher and trading around $22.25 a barrel, on short covering and perceived bargain hunting after hitting an 18-year low of $19.27 a barrel Monday. The rally in oil prices today is helping to lift the U.S. stock indexes early on. There are ideas the U.S., Russia and Saudi Arabia may be close to agreement on a deal to halt the Saudi-Russia oil-price war. President Trump said he is hopeful an agreement between Saudi Arabia and Russia will be reached soon. There are more than a few oil market watchers that are skeptical the Russians and Saudis will come to any significant agreement to reduce their oil output levels. Both major oil-producing countries hate the U.S. shale oil industry and are very likely enjoying watching U.S. oil companies suffer. Reports also said China will be buying crude oil for its strategic petroleum reserve. China reportedly at present has over 1 billion barrels of empty oil storage capacity, at the same time the U.S. has very little to none.
The U.S. dollar index is slightly down early this morning but the bulls are having a good week, overall. When the going gets really, really tough it appears global traders and investors still seek out the greenback. The 10-year U.S. Treasury note yield is trading around 0.59% Thursday morning, after trading above 1.0% last week. Declining U.S. Treasury yields recently are a sign that U.S. bond traders (arguably the smartest traders in the world) expect more serious markets/economic turmoil on the horizon, including suggesting that most markets have not yet fully priced in the eventual global economic toll the coronavirus sickness will exact.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ISM New York report on business, and manufacturers’ shipments and inventories.
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bears have the 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 above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 2,562.25 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at this week’s low of 2,434.25 and then at 2,400.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 the overnight high of 7,596.50 and then at 7,700.00. On the downside, short-term support is seen at the overnight low of 7,459.75 and then at this week’s low of 7,365.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly higher and hit a three-week high in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 182 26/32 and then at 183 even. Shorter-term support lies at the overnight low of 181 24/32 and then at 181 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher and hit a three-week high in early U.S. trading. Bulls have the solid technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 139.14.5 and then at 139.24.0. Shorter-term technical support lies at Wednesday’s low of 138.25.0 and then at this week’s low of 138.11.0. 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 near steady in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field but the bulls are having a good week. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below 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 bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 100.125 and then at 100.500. Shorter-term support is seen at 99.500 and then at 99.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
May Nymex crude oil prices are solidly higher in early U.S. trading, on short covering and perceived bargain hunting. Bears still have the solid overall near-term technical advantage amid a price downtrend 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 bullish early today. Look for buy stops to reside just above technical resistance at $23.00 and then at $24.00. Look for sell stops just below technical support at $21.00 and then at $20.00. Wyckoff’s Intra-Day Market Rating: 7.0
US grain futures are mixed in early US pre-market trading. Grain traders remain focused on the coronavirus outbreak and its dire economic and psychological consequences that have yet to fully play out. That’s fully bearish for grains. Traders will examine this morning’s weekly USDA export sales report, especially to see if China is buying more U.S. grains. Technically, wheat and soybean bulls do still have the slight overall near-term technical advantage, with corn bears in firm 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.