Tuesday, April 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed to slightly up in quieter trading overnight, following Monday’s good gains. U.S. stock indexes are pointed toward steady to mixed openings when the New York day session begins. The U.S. indexes are at or near their recent multi-month highs and are enjoying solid price uptrends on the charts.
In overnight news, Australia’s central bank, the Royal Bank of Australia, left its monetary policy unchanged at the bank’s regular meeting. The RBA did warn that the Aussie economy is not meeting its inflation target and doing so may take a while. This continues a theme of very low, and possibly even problematic, inflation in the major economies of the world. Low inflation is the enemy of raw commodity market bulls.
The World Trade Organization has cut its 2019 world trade growth forecast to 2.6% from 3.7%, mainly due to the U.S.-China trade war. The WTO also said trade growth in 2017 slowed to 3% from 4.6% in 2017.
The Euro zone February producer price index came in at up 0.1% from January and up 3.0%, year-on-year. Those figures were in line with market expectations.
Bitcoin prices made a sudden jump higher in overnight trading, but the reason is unclear.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are also higher, hit another 4.5-month high overnight and are trading just above $62.00 a barrel.
U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, durable goods orders, the ISM New York report on business, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading today. Prices Monday hit a nearly six-month high. Bulls have the firm near-term technical advantage amid a price uptrend on the daily chart. 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 bullish early today. Today, shorter-term technical resistance comes in at 2,900.00 and then at 2,915.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,844.50 and then at 2,820.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a price uptrend. 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 to bullish early today. Shorter-term technical resistance is seen at the March high of 7,544.75 and then at 7,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,450.00 and then at at Monday’s low of 7,428.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer early today on a corrective bounce from Monday’s solid losses that were profit taking. Bulls still have the firm overall 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 early today. Shorter-term technical resistance is seen at the overnight high of 148 19/32 and then at 149 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 147 31/32 and then at 147 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 higher in early U.S. trading, following Monday’s losses. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 123.26.5 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.19.5 and then at Monday’s low of 123.16.5. 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 higher in early U.S. trading and very close to the March for-the-move high. Bulls have the solid overall near-term technical advantage. 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 bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 97.045 and then at the March high of 97.160. Shorter-term support is seen at Monday’s low of 96.580 and then at 96.250. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
May Nymex crude oil prices are higher and hit another 4.5-month high in early U.S. trading. Bulls have the firm near-term technical advantage and are keeping a gentle uptrend in place on the daily bar chart. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 $62.50 and then at $63.00. Look for sell stops just below technical support at the overnight low of $61.62 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed overnight. Bears have the overall near-term technical advantage in the grains, and gained more power last week after generally bearish USDA reports. Right now, the bulls are just trying to stabilize prices. It’s very likely going to take a weather market in the Corn Belt in the coming few months to jumpstart any rallies in the grain markets.
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