Friday, April 1–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed but mostly firmer overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. stock indexes are in near-term price uptrends.
Here’s the latest news/analysis on the Russia-Ukraine war front from Broker SP Angel in a morning email dispatch: “The Russia-Ukraine war is unlikely to end until Russians are expelled from Ukraine or to a defensible position. Russia is highly unlikely to voluntarily exit the Ukraine but may be forced into retreat if reports of significant non-compliance by troops are true. Increasing reports of Russian soldiers refusing to fight in Ukraine are encouraging Ukraine forces in their drive to expel foreign forces. A U.S. report also suggests the Russian convoy into Kyiv may no longer exist. Further reports on Russian conscripts and students being sent into battle with poor equipment support news on the poor state of the Russian army. We suspect the Ukraine military will extract a high price while they have Russian forces on the run, partly to ensure the Russian army does not want to come back in a hurry. The West is likely to continue to fund the humiliation of Russia’s once proud military machine. We expect the war to continue at least for another few months as Ukraine forces work to expel the invaders.”
In other news, Euro zone inflation accelerated to a record 7.5% in March, year-on-year, from a revised 5.9% in February, mainly due to the Russia-Ukraine war driving up energy costs. These numbers call into question the European Central Bank’s inflation projection of just 5.1% for the year. Money markets are now pricing in more aggressive tightening of monetary policy from the European Central Bank this year.
Traders are awaiting Friday morning’s monthly U.S. employment situation report for March, which is expected to see the key non-farm payrolls number come in at up 490,000, compared to a rise of 678,000 seen in the February report.
Nymex crude oil prices are near steady and trading around $100.00 a barrel. The Biden administration is releasing up to 1 million barrels a day in the coming months from its strategic petroleum reserve, for a total of 180 million barrels. The Wall Street Journal reports that commodity prices, overall, in the first quarter rose at the fastest pace in over 30 years, led by rising energy costs.
Meantime, the U.S. dollar index is slightly higher early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.404%.
Other U.S. economic data due for release Friday includes the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, construction spending, the global manufacturing PMI and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are modestly up in early U.S. trading. Prices are trending higher on the daily bar chart and the bulls have the 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 and 18-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 this week’s high of 4,631.00 and then at 4,650.00. Support for active traders is seen at this week’s low of 4,509.75 and then at 4,450.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at this week’s high of 15,268.75 and then at 15,500.00. On the downside, shorter-term support is seen at this week’s low of 14,658.75 and then at 14,500.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly lower in early U.S. trading. Bears are in solid command. 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 150 even and then at this week’s high of 150 13/32. Shorter-term support lies at the overnight low of 148 8/32 and then at 147 even. Wyckoff’s Intra-Day Market Rating: 3.4
June U.S. T-Notes: Prices are solidly lower in early U.S. trading. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 122.21.5 and then at 123.00.0. Shorter-term technical support lies at the overnight low of 121.28.5 and then at 121.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The June Euro currency futures are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage. However, bulls are working on starting a price uptrend on the daily chart. 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.1150 and then at 1.1200. Shorter-term support is seen at 1.1000 and then at this week’s low of 1.0977. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $102.50 and then at $105.00. Look for sell stops just below technical support at the overnight low of $97.78 and then at $96.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures prices were mixed but mostly weaker in early U.S. pre-market trading. Thursday’s all-important USDA planting intentions report was bullish for corn and bearish for soybeans. Corn bulls have the solid near-term technical advantage, soybeans bulls the firm overall chart advantage but are fading, and wheat bulls and bears are on a level technical playing field, but prices are in near-term downtrends.
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