Thursday, April 30–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer in overnight trading, while the U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Some upbeat news Wednesday on a drug trial that lessens the effects of Covid-19 and a big rebound in crude oil prices are prompting better trader and investor risk appetite as April winds down today. Many U.S. states are now partially reopening their businesses.
In overnight news, the Euro zone economy contracted by 3.8% in the first quarter from the fourth quarter of 2019, and was down 14.4%, year-on-year. Those numbers are a record for the 14-nation bloc. The year-on-year decline in Euro zone GDP was much greater than the 4.8% drop in U.S. GDP in the same period, and reported on Wednesday.
A Reuters (Refinitiv) survey just released shows global jewelry fabrication volumes, which typically account for around 55% of total physical demand for gold, fell 40% in the first quarter, year-on-year. Investment demand was mixed, with retail investment, which consists of bars and coins, posting an 11% year-on-year drop. Physical gold demand fell to 753 metric tons in the first quarter, the lowest levels since 2009 as higher gold prices led to a drop in consumption. The biggest declines were recorded in Asia at down over 43% year-on-year. Chinese demand recorded a 62% decline in jewelry fabrication in the period.
The important outside markets see Nymex crude oil again sharply higher and trading around $17.50 a barrel. The U.S. dollar index is slightly weaker again today. The greenback bulls are fading this week, partly on notions other major countries’ economies are coming back to life faster than that of the U.S. The 10-year U.S. Treasury note yield is trading around 0.6% this morning.
U.S. economic reports due for release Thursday include the weekly jobless claims report, which has become the focal point of the marketplace in recent weeks. This week’s jobless number is forecast to be 3.5 million in new claims. Other reports out today include personal income and outlays, the employment cost index, and the ISM Chicago business survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading after hitting a seven-week high overnight. Bulls have the near-term technical advantage as prices are in a near-term uptrend on the daily chart. 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 overnight high of 2,965.00 and then at 3,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at 2,900.00 and then at Wednesday’s low of 2,860.75. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are higher in early U.S. trading and hit a seven-week high overnight. A price uptrend is in place on the daily chart. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 9,144.75 and then at 9,200.00. On the downside, short-term support is seen at 9,000.00 and then at 8,900.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bulls have the firm 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 above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 182 20/32 and then at the April high of 183 1/32. Shorter-term support lies at 181 even and then at this week’s low of 180 3/32. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher in early U.S. trading. Bulls have the solid near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 139.09.0 and then at 139.16.0. Shorter-term technical support lies at the overnight low of 138.30.0 and then at 138.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is modestly lower and hit a two-week low in early U.S. trading. Bulls have the overall near-term technical advantage but are fading. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 99.780 and then at 100.000. Shorter-term support is seen at 99.250 and then at 99.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
June Nymex crude oil prices are again sharply higher in early U.S. trading, on more short covering and bargain hunting. The bears still have the overall near-term technical advantage. The shorter-term moving averages are still bearish early today as the 4-day is below the 18-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at $18.00 and then at $19.00. Look for sell stops just below technical support at $17.00 and then at $16.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
US grain futures are mixed again in early US pre-market trading, with corn and wheat weaker and soybeans firmer. Today’s highlight will be the weekly USDA export sales report. Bears remain in firm technical control. Expect more downside in the grain futures prices in the near term, amid global demand worries.
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