Thursday, April 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward higher openings when the New York day session begins. Risk appetite has again quickly returned to the marketplace Thursday morning, as fears have somewhat eased regarding a potential U.S.-China trade war. Traders tend to initially factor in worst-case scenarios on expected events and then ratchet down those expectations. Still, there are no strong signs the U.S. and China will not proceed with their intended trade sanctions on each other. In the near term, look for more market volatility coming from this situation.
In overnight news, the Euro zone producer price index for February came in at up 0.1% from January and up 1.6%, year-on-year. Those numbers were just a bit higher than expected, but not considered problematic.
Traders are turning their attention to Friday morning’s important U.S. employment situation report for March from the Labor Department. The key non-farm payrolls number is forecast to come in at up 178,000. Wednesday’s ADP jobs number came in much higher than expected, at up 241,000, which hints Friday’s job number may also come in hot.
The key “outside markets” on Thursday morning see the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are slightly lower and trading just above $63.00 a barrel.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, and the global services purchasing managers index (PMI).
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are higher in early U.S. trading. Trading has been choppy but a downtrend line is still in place on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,667.00 and then at 2,680.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,644.00 and then at 2,625.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index December futures: Prices are higher in early U.S. trading. Prices are still in a downtrend on the daily bar chart. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 6,654.50 and 6,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,574.00 and then at 6,500.00. 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 lower in early U.S. trading, on profit taking from recent gains. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 145 16/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 144 27/32 and then at 144 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading, on profit taking. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 120.23.5 and then at 121.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.18.0 and then at 120.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly higher in early U.S. trading. The shorter-term moving averages for the dollar index are neutral as the 4-day is above the 9-day and 18-day. The 9-day is even with 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 90.025 and then at the March high of 90.490. Shorter-term support is seen at this week’s low of 89.415 and then at 89.250. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
May Nymex crude oil prices are slightly lower in early U.S. trading. Look for buy stops to reside just above technical resistance at $63.86 and then at $64.50. Look for sell stops just below technical support at $62.50 and then at this week’s low of $62.06. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were higher overnight. Fears of a U.S.-China trade war are still scaring grain traders a bit, but now the potential tariffs on U.S. ag products may be mostly factored into grain futures prices.