Thursday, April 7–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. A feature in the marketplace late this week is Nymex crude oil futures prices that dropped sharply on Wednesday and are presently trading below $100 a barrel. That has put just a bit of risk appetite back into a still very uncertain global marketplace amid the Russia-Ukraine war. Nymex crude oil prices are presently trading around $98.00 a barrel.
Federal Reserve FOMC meeting minutes released Wednesday afternoon were hawkish in tone, but typically dovish Fed governor Lael Brainard on Tuesday somewhat pre-empted the FOMC minutes by sounding aggressively hawkish on U.S. monetary policy and the inflation fight. U.S. Treasury yields are rising again and this week hit a three-year high. Treasury yields are very likely headed still higher in the coming weeks, or longer. There’s an old trading adage that says anytime a trade seems like a “no-brainer” the trader needs to be extra beware. This longtime market watcher believes there is one futures trade at present that is an exception to that old maxim: selling U.S. Treasury bond and note futures. U.S. Treasury prices fall as yields rise. The benchmark 10-year U.S. Treasury note yield is presently fetching 2.585%.
Meantime, the U.S. dollar index is slightly higher early today and hit a nearly two-year high overnight. Greenback bulls remain very strong, technically and fundamentally.
Crypto currencies are under pressure late this week, due in part to news the U.S. Treasury is set to call for more oversight regulation of the cryptos.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the monthly chain store sales index and consumer credit.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls have faded this week. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 4,528.75 and then at this week’s high of 4,588.75. Support for active traders is seen at this week’s low of 4,444.50 and then at 4,400.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at Wednesday’s high of 14,861.25 and then at 15,000.00. On the downside, shorter-term support is seen at this week’s low of 14,394.75 and then at 14,200.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Bears are in solid technical command. 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 technical resistance is seen at Wednesday’s high of 146 22/32 and then at 147 even. Shorter-term support lies at the contract low of 144 24/32 and then at 144 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are firmer in early U.S. trading. Bears are in solid near-term technical control. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 121.06.5 and then at 121.16.0. Shorter-term technical support lies at the contract low of 120.05.5 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are slightly down in early U.S. trading. Bears have the solid 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 Wednesday’s high of 1.0966 and then at Tuesday’s high of 1.1017. Shorter-term support is seen at the overnight low of 1.0891 and then at the March low of 1.0845. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are firmer in early U.S. trading. The shorter-term moving averages are bearish early today 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $100.00 and then at $102.00. Look for sell stops just below technical support at the overnight low of $95.43 and then at $94.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures prices were mixed to weaker in early U.S. pre-market trading. Corn and soybean bulls have the overall near-term technical advantage. Wheat bulls and bears are on a level technical playing field. Focus of grain traders will continue on the key outside markets (crude oil, U.S. dollar index and U.S. stock indexes), but is also shifting to U.S. weather patterns as corn and soybean planting season is not far off. It looks to be a wetter early season for corn planting and that’s bullish for corn. On tap today is the weekly USDA export sales report.
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