Thursday, March 26–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower in overnight trading. U.S. stock index futures are presently pointed toward lower openings when the New York electronic day session begins. The equity markets are ignoring the overnight news the U.S. Senate has passed a $2.2 trillion financial aid package for U.S. businesses and citizens negatively impacted by the Covid-19 outbreak. The measure was expected to be passed and now moves to the House of Representatives for a vote.
Now, traders and investors are squarely focused on Thursday morning’s weekly jobless claims report, which is expected to show an enormous and record-setting rise of 1.5 million claims, or more, in the latest reporting week. This weekly report will be the first one to more fully reflect a U.S. economy that has been severely crippled by the closure of most retail stores across the nation due to the coronavirus outbreak that continues to spread rapidly in the U.S. The jobless claims report will very likely be a grim testament to the damage being inflicted on the world’s largest economy. Such could put more downside price pressure on the U.S. stock indexes during the day session Thursday.
The important outside markets today see Nymex crude oil prices down and trading around $23.85 a barrel. The U.S. is pressuring Saudi Arabia to hold off on producing more oil that is helping to cripple the U.S. economy. It’s doubtful the Saudis will listen as they hate the U.S. fracking industry. The U.S. dollar index is again solidly lower as greenback bulls are fading fast after the USDX hit a 17-year high earlier this week. The 10-year U.S. Treasury note yield is trading around 0.81% Thursday morning.
Other U.S. economic data due for release Thursday includes the third estimate of four-quarter GDP, advance economic indicators, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 2,497.50 and then at this week’s high of 2,560.75. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 2,412.00 and then at Wednesday’s low of 2,386.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are slightly lower in early U.S. trading. Bears 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 above the 9-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 7,500.00 and then at the overnight high of 7,549.50. On the downside, short-term support is seen at the overnight low of 7,321.25 and then at 7,200.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading. Bulls have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at Wednesday’s high of 179 21/32 and then at 180 even. Shorter-term support lies at the overnight low of 177 12/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 137.26.0 and then at 138.00.0. Shorter-term technical support lies at the overnight low of 137.07.0 and then at Tuesday’s low of 136.29.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is again solidly down in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading fast and need to show fresh power soon. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above 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 100.240 and then at 100.750. Shorter-term support is seen at the overnight low of 100.240 and then at 100.000. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
May Nymex crude oil prices are weaker in early U.S. trading. Bears have the solid overall near-term technical advantage amid a price downtrend in place. 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $25.24 and then at $26.00. Look for sell stops just below technical support at $23.00 and then at $22.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
US grain futures are weaker in early US pre-market trading. The grain futures markets appear to have stabilized at present, with wheat bulls surging. If the U.S. stock market stabilizes, normalcy will return to the grain markets and that would be bullish for grain futures prices. Traders will closely watch Thursday morning’s weekly USDA export sales report, especially for any big buys from China.
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