Monday, April 8–Jim Wyckoff’s morning markets report
The economic highlights this week will be Wednesday, with the releases of the March consumer price index and the minutes of the last FOMC meeting. Thursday comes the U.S. March producer price index and the European Central Bank monetary policy meeting.
In weekend/overnight news, Israel said it is withdrawing some of its troops from Gaza but said the ground offensive will continue. Ceasefire talks are said to be ongoing.
Gold prices hit another record high overnight, with June Comex gold futures climbing to $2,372.50. Broker SP Angel today in an email dispatch said the rally has “dumfounded” most analysts, given the break from its correlation with U.S. Treasuries, which have sold off over the past month. Also, the U.S. dollar has been stronger and that’s usually bearish for gold and silver. “Central bank buying has been a sustained source of support for gold, with Bloomberg reporting China’s PBOC has added gold for the 17th month in a row,” said the broker, adding this has fueled speculation over a potential devaluation of the Chinese yuan, as well as geopolitical concerns over heightened aggression against Taiwan.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $86.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.45%.
U.S. economic data due for release Monday is light and includes the employment trends index.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are a bit weaker in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices are in a five-month-old uptrend on the daily bar chart. The shorter-term moving averages (4-day, 9-day and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 5,308.50 and then at the contract high of 5,333.50. Support for active traders is seen at last week’s low of 5,191.50 and then at 5,150.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly lower in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 18,500.00 and then at 18,600.00. On the downside, shorter-term support is seen at last week’s low of 18,051.50 and then at 18,000.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower and hit a four-month 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 and 18-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 the overnight high of 117 4/32 and then at 118 even. Shorter-term support lies at 116 even and then at 115 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower and hit a four-month 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 109.13.5 and then at 109.24.0. Shorter-term technical support is seen at 109.00.0 and then at 108.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are just a bit weaker in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0908 and then at 1.0950. Shorter-term support is seen at 1.0800 and then at last week’s low of 1.0758. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are weaker in early U.S. trading after hitting a five-month high last Friday. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at last week’s high of $87.63 and then at $89.00. Look for sell stops just below technical support at $85.00 and then at $83.85. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed overnight. On tap today is the weekly USDA export inspections report and weekly USDA crop progress reports. Charts remain overall bearish for wheat, soybeans, meal and bean oil. However, corn, soybeans, meal and bean oil, and HRW wheat have broken their near-term price downtrends on the daily charts, to suggest market bottoms are in place.
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