Tuesday, March 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were near steady to mostly firmer overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Risk appetite is keener Tuesday following a bit of concern Monday regarding the unwinding of stock positions of a big investment fund, Archegos, after that firm became over-leveraged. A few individual stocks have been impacted but not the general stock and financial markets—at least not yet. Most market watchers reckon the matter will fade away with no contagion effect.
Traders and investors are generally upbeat amid a strengthening U.S. economy, more and more people getting the Covid vaccine, and with President Biden is set to unveil on Wednesday the first of two expected portions of the next phase of his U.S. economic agenda. That package would cost $3 trillion to $4 trillion. However, somewhat tempering enthusiasm in the marketplace is an uptick in Covid infections in Europe and now the U.S.
Gold prices are solidly lower again today and hit a three-week low overnight, as the yellow metal feels the pressure of rising bond yields, a stronger U.S. dollar and a wobbly crude oil market. Also, the U.S. and many global stock markets continue to show resilience despite some worrisome external forces, such as rising bond yields and Covid not yet releasing its grip on major economies.
The key outside markets today see the U.S. dollar index higher and hitting another 4.5-month high overnight. Nymex crude oil prices are lower and trading around $60.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 1.772%–hitting a 14-month high overnight.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the S&P-Core-Logic home indexes, and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading but not far below the recent contract and record high. Bulls have the solid overall near-term technical advantage. 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 early today. Today, shorter-term technical resistance comes in at the contract high of 3,978.50 and then at 4,000.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Monday’s low of 3,928.75 and then at 3,900.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are lower in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 13,000.00 and then at 13,100.00. On the downside, shorter-term support is seen at Monday’s low of 12,807.50 and then at 12,700.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower and near the contract low in early U.S. trading today. Bears have the solid overall near-term technical advantage. 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 below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 155 even and then at 156 even. Shorter-term support lies at the overnight low of 153 29/32 and then at the contract low of 153 7/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower and hit a contract low 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 131.00.0 and then at 131.08.0. Shorter-term technical support lies at the overnight contract low of 130.26.0 and then at 130.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The June Euro currency futures are lower and hit a 4.5-month low in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1792 and then at Monday’s high of 1.1813. Shorter-term support is seen at 1.1725 and then at 1.1700. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
May Nymex crude oil prices are lower in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $62.27 and then at $63.00. Look for sell stops just below technical support at $60.00 and then at Monday’s low of $59.41. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are steady to weaker in early U.S. pre-market trading. Grain traders are pausing ahead of the very important USDA planting intentions and quarterly grains stocks reports on Wednesday. Corn and soybean market bulls still have the solid overall near-term technical advantage but price uptrends have stalled out. Wheat bulls have faded as prices are now trending lower on the daily charts.
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