Thursday, April 27–Jim Wyckoff’s morning markets report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite is a bit better Thursday, but by no means robust, following the big drop in share price of First Republic Bank earlier this week. Also, the specter of a U.S. economic recession is moving closer to the front burner of the marketplace. It could be that the growing U.S. government debt burden and congressional wrangling regarding what to do about it are also crimping investor enthusiasm. Reads a Wall Street Journal headline today: “Banking turmoil is tip of debt iceberg.”
The U.S. data point of the day Thursday is the advance estimate of first-quarter U.S. gross domestic product. GDP is seen coming in up 2.0%, year-on-year, compared to a rise of 2.6% in the fourth quarter of last year. The closely watched PCE price index is expected to be up 3.7%, year-on-year, versus a rise of 3.9% in the fourth quarter.
The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are near steady and trading around $74.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.452%.
Other U.S. economic data due for release Thursday includes weekly jobless claims and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have faded this week as a price uptrend on the daily chart has stalled out. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 4,116.25 and then at this week’s high of 4,164.00. Support for active traders is seen at this week’s low of 4,080.75 and then at 4,050.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are 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 early today. Shorter-term technical resistance is seen at this week’s high of 13,134.00 and then at the April high of 13,348.75. On the downside, shorter-term support is seen at this week’s low of 12,800.00 and then at 12,700.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 132 even and then at this week’s high of 132 21/32. Shorter-term support lies at 130 16/32 and then at this week’s low of 129 26/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 115.30.5 and then at 116.10.0. Shorter-term technical support is seen at 115.00.0 and then at this week’s low of 114.14.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are slightly up in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bullish early today, as the 4-day is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1129 and then at 1.1200. Shorter-term support is seen at 1.1000 and then at last week’s low of 1.0947. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
June Nymex crude oil prices are slightly up in early U.S. trading. Bulls have faded recently. 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 to bearish early today. Look for buy stops to reside just above technical resistance at $75.83 and then at $77.00. Look for sell stops just below technical support at this week’s low of $74.05 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were lower overnight. On tap today is the weekly USDA export sales report. The July futures contracts in grains see the technical postures for all the markets bearish. Less risk appetite in the general marketplace this week is also negative for the grains, including rising fears of a U.S. recession. Generally good corn and soybean planting weather so far is also bearish for the grains.
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