Wednesday, May 1–Jim Wyckoff’s Morning Markets Report
Those Asian and European stock markets that were open overnight were mixed in very quiet trading. Most overseas markets in European and Asia were closed for the May Day holiday today. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
The U.S. economic data highlight of the week is today’s conclusion of the Federal Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. No change in U.S. monetary policy is expected at this meeting. However, as usual, the FOMC statement and Powell’s comments will be parsed by the marketplace for clues on the timing of future monetary policy changes, and on inflation prospects.
Another important U.S. economic report released today is the ADP national employment report for April, which is forecast to come in at up 177,000. This report is a precursor to the more important employment situation report from the Labor Department on Friday morning.
The key “outside markets” today see the U.S. dollar index down again on more profit taking after hitting a two-year high last week. Meantime, Nymex crude oil prices are lower and trading around $63.50 a barrel.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. manufacturing purchasing managers index (PMI), construction spending, the ISM manufacturing report on business, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading today, hit another nearly seven-month high and matched the contract high set last fall. Bulls have the solid near-term technical advantage amid a price uptrend on the daily chart and no early clues that a market top is close at hand. 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 to bullish early today. Today, shorter-term technical resistance comes in at the contract high of 2,961.25 and then at 2,975.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,926.00 and then at 2,915.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
June Nasdaq index futures: Prices are higher in early U.S. trading and not far below last week’s contract high. Bulls have the solid 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 last week’s contract high of 7,879.50 and then at 7,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,800.00 and then at this week’s low of 7,740.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer 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- and 18-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 last week’s high of 147 26/32 and then at 148 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 146 24/32 and then at 146 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 19-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 and last week’s high of 123.24.0 and then at 123.29.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.16.0 and then at this week’s low of 123.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is lower again early today on more profit taking after prices last week hit a two-year high. Bulls are fading this week but 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 even with 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 97.270 and then at 97.500. Shorter-term support is seen at 97.000 and then at 96.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage and are trying to keep a gentle uptrend in place on the daily bar chart. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $64.75 and then at $65.00. Look for sell stops just below technical support at $63.00 and then at last week’s low of $62.28. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were mixed overnight. Grain market bears have the firm overall near-term technical advantage. Focus is on U.S. Corn Belt weather, which is a mixed bag now. It’s bullish for corn because of planting delays, which in turn is bearish for soybeans due to more bean acres likely planted. For wheat the wet weather is generally bearish. Traders are closely monitoring any progress on the U.S.-China trade talks this week.
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