Friday, April 21–Jim Wyckoff’s morning markets report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The U.S. stock indexes are listing this week amid some heightened risk aversion. Reads one Wall Street Journal headline today: “Disappointing earnings, recession fear press stocks.” Another WSJ headline reads: “Slide in transport stocks seen as recession indicator.”
However, another business news headline early this week read: “The most highly anticipated economic recession never seen.” The headline was fitting as recent U.S. economic data has come in generally upbeat, including U.S. non-farm jobs growth above to well above 200,000 the past year. Consumer and producer price inflation have tamed the past months and are trending lower. U.S. stock index prices that are not far below 1.5-year highs and the recent rallies in corn, soybeans, HRW wheat and cattle futures certainly don’t suggest a U.S./global economic slowdown. Barring an unexpected banking turmoil flare-up or major geopolitical shock occurring in the coming months, the U.S. economy will likely have successfully attained a “soft landing” and will be set for more sustained growth in 2024.
In overnight news, the Euro zone’s flash composite purchasing managers’ index (PMI) came in at 54.4 in March, which was slightly above market expectations. A reading above 50.0 suggests growth. However, the manufacturing PMI came in at only 45.5, which was well below market expectations. The services PMI was 56.6.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are slightly lower and trading around $77.25 a barrel. Oil prices have backed off recently on demand concerns amid global economic recession worries. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.524%.
U.S. economic data due for release Friday includes the U.S. flash manufacturing and services purchasing managers’ indexes.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are a bit lower in early U.S. trading. A price uptrend on the daily bar chart has stalled out. 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 bearish early today. Today, shorter-term technical resistance comes in at Thursday’s high of 4,173.50 and then at this week’s high of 4,198.25. Support for active traders is seen at this week’s low of 4,137.00 and then at the April low of 4,096.50. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are weaker in early U.S. trading. A price uptrend on the daily bar chart has stalled out. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Thursday’s high of 13,200.00 and then at the April high of 13,348.75. On the downside, shorter-term support is seen at the April low of 12,925.50 and then at 12,750.00. Wyckoff’s Intra-Day Market Rating: 4.5.
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 bearish early today. The 4-day moving average is below the 9-day 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 this week’s high of 130 31/32 and then at 132 even. Shorter-term support lies at 130 even and then at this week’s low of 129 4/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day 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 resistance lies at this week’s high of 114.31.0 and then at 115.10.0. Shorter-term technical support is seen at Thursday’s low of 114.07.0 and then at this week’s low of 113.30.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are near steady in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1038 and then at last week’s high of 1.1114. Shorter-term support is seen at this week’s low of 1.0947 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
June Nymex crude oil prices are weaker and hit a three-week low in early U.S. trading. Bulls are fading. A four-week-old uptrend on the daily bar chart has been negated. 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 Thursday’s high of $79.07 and then at $80.00. Look for sell stops just below technical support at $75.83 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed to lower overnight. Grain market bulls are fading this week, amid keener risk aversion that has squelched the grain market bulls. Soybean and corn market bulls still have the chart advantage. SRW wheat bears have the firm overall near-term chart advantage and HRW bulls have lost their slight chart edge. Focus of grain traders is on weather in the U.S. Midwest, Plains and mid-South as corn and soybean planting gets under way. A serious cold snap in the upper and central U.S. this weekend could produce some freeze damage to early planted crops and to wheat.
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