Wednesday, April 4–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were lower overnight. U.S. stock indexes are pointed toward sharply lower openings when the New York day session begins.
Fears of a global trade war have ratcheted up a notch after China today announced a big list of U.S. products on which it intends to slap new tariffs. These products include cars, soybeans and airplanes. This action follows a U.S. announcement of new U.S. duties on Chinese imports on Tuesday. While the U.S. and China have said they will begin negotiations to resolve their trade dispute, this tit-for-tat action has the world marketplace experiencing significant anxiety as the world’s number-one and number-two economies square off.
Safe-haven assets gold, silver and U.S. Treasuries are rallying today on the keener risk aversion in the marketplace.
In other overnight news, the March Euro zone consumer price index came in at up 1.4%, year-on-year, which was above market expectations. The February reading was up 1.1%. Still, the numbers are well below the 2.0% inflation rate that the European Central Bank deems an optimum level.
The key “outside markets” on Wednesday morning see the U.S. dollar index slightly lower. Meantime, Nymex crude oil prices are lower and trading just above $62.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. services PMI, manufacturers’ shipments and inventories, the ISM non-manufacturing report, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are sharply lower in early U.S. trading. Bears have downside technical momentum. The 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 is below 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 2,585.00 and then at 2,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,552.00 and then at the February low of 2,532.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 3.5
June Nasdaq index December futures: Prices are lower and hit a seven-week low in early U.S. trading. Bears have downside momentum. 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 bearish early today. Shorter-term technical resistance is seen at 6,350.00 and 6,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,306.75 and then at 6,250.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are higher in early U.S. trading, on safe-haven demand. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 146 20/32 and then at this week’s high of 147 3/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 145 22/32 and then at 145 12/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading, on safe-haven demand. Bulls have upside momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at Tuesday’s high of 121.08.5 and then at this week’s high of 121.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 121.00.0 and then at this week’s low of 120.25.5. 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 slightly lower in early U.S. trading. The shorter-term moving averages for the dollar index are neutral as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 90.025 and then at the March high of 90.490. Shorter-term support is seen at this week’s low of 89.415 and then at 89.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are lower and hit a two-week low in early U.S. trading. Bulls are fading this week, to begin to suggest a near-term market top is in place. Look for buy stops to reside just above technical resistance at $63.00 and then at $64.00. Look for sell stops just below technical support at $62.00 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures were lower overnight, with soybeans sharply lower. Fears of a U.S.-China trade war have escalated as China has targeted U.S. soybeans for new tariffs. This has spooked the entire grain market.