Tuesday, March 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are again pointed toward higher openings when the New York day session begins.
Risk appetite is back in the marketplace this week amid early signs the U.S. and China will work out their trade disagreements. That’s bullish for world stock markets and bearish for safe-haven gold and silver markets.
In overnight news, China’s central bank pushed the value of its currency, the yuan, to a 2.5-year high against the U.S. dollar Tuesday. The move by China’s central bank could be an effort to assuage U.S. trade concerns. A stronger yuan makes importing China’s products more expensive.
The key “outside markets” on Tuesday morning see the U.S. dollar index higher on a corrective bounce after hitting a five-week low on Monday. Meantime, Nymex crude oil prices are higher and trading just below $66.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the S&P/Case-Shiller home price index, the consumer confidence index, and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are higher again in early U.S. trading, on a corrective bounce from last week’s solid losses. Bulls are out of the gate in strong fashion early this week. The shorter-term moving averages (4-, 9- and 18-day) are still 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,700.00 and then at 2,725.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,656.75 and then at 2,640.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index December futures: Prices are solidly lower in early U.S. trading, on a corrective bounce from last week’s strong selling pressure. Shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 6,849.25 and 6,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,770.50 and then at 6,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are weaker 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. 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 144 24/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 144 7/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are near steady in early U.S. trading. Bears still have the 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. 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 this week’s high of 120.23.5 and then at last week’s high of 120.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.11.0 and then at 120.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is higher on short covering after hitting a five-week low overnight. The shorter-term moving averages for the dollar index are bearish 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 for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 89.105 and then at Friday’s high of 89.345. Shorter-term support is seen at the overnight low of 88.530 and then at 88.250. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
May Nymex crude oil prices are firmer in early U.S. trading. Bulls still have upside momentum to suggest a push to a new multi-year high soon. Look for buy stops to reside just above technical resistance at this week’s high of $66.55 and then at $67.00. Look for sell stops just below technical support at $65.00 and then at $64.11. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were mixed to firmer overnight. Support early this week comes from a lessening of trade war fears. On Thursday the USDA planting intentions report is due out, which is one of the most important reports of the year for the grain markets.