Tuesday, April 5–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed to firmer overnight. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Stocks in Hong Kong and mainland China were closed for a holiday Tuesday. The civilian atrocities committed by Russian soldiers in Ukraine have ratcheted up trader and investor risk aversion this week as the West debates sanctioning Russian energy exports, which would be a crippling blow to the Russian economy, but also would severely disrupt energy supplies in Europe.
Rising Covid cases in China are also of concern to the global marketplace, as is the specter of rising inflation. Traders will closely examine Wednesday afternoon’s release of the minutes from the last FOMC meeting, for clues on the future trajectory of U.S. monetary policy.
The 2-year/10-year U.S. Treasury notes yield curve is now inverted (2-year yield above 10-year), which is one historical clue, although not 100% predictive, that the U.S. is headed for economic recession.
In other news, reports said the U.S. Mint has seen its strongest gold sales since 1999. First-quarter sales rose to 426,500 ounces, up 3.5% compared to the same period last year. The first quarter of this year was the mint’s strongest sales quarter in 23 years. In March, the U.S. Mint reported that it sold 155,500 ounces of various denominations of its American Eagle Gold bullion coins, up 73% from February.
Nymex crude oil prices are up and trading around $104.50 a barrel. Meantime, the U.S. dollar index is slightly higher early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.423%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, the international trade report, the ISM report on business services and the U.S. services purchasing managers index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly down in early U.S. trading. Prices are still 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 neutral early today. The 4-day moving average is below the 9-day. The 9-day is above 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 4,600.00 and then at the March high of 4,631.00. Support for active traders is seen at last week’s low of 4,501.25 and then at 4,450.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are a bit weaker 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 early today. Shorter-term technical resistance is seen at the March high of 15,268.75 and then at 15,500.00. On the downside, shorter-term support is seen at Monday’s low of 14,801.00 and then at last week’s low of 14,658.75. Wyckoff’s Intra-Day Market Rating: 4.5.
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 technical 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 149 21/32 and then at last week’s high of 150 13/32. Shorter-term support lies at 147 16/32 and then at 147 even. 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 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 122.00.0 and then at this week’s high of 122.12.5. Shorter-term technical support lies at 121.10.0 and then at the contract low of 120.30.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The June Euro currency futures are steady in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below 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 this week’s high of 1.1083 and then at 1.1105. Shorter-term support is seen at 1.0977 and then at 1.0935. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher 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 neutral early today. Look for buy stops to reside just above technical resistance at $106.00 and then at $107.50. Look for sell stops just below technical support at $102.50 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading. Corn and soybean bulls have the overall near-term technical advantage. Wheat bulls and bears are on a level technical playing field. Focus of grain traders will continue on the key outside markets (crude oil, U.S. dollar index and U.S. stock indexes), but is also shifting to U.S. weather patters as corn and soybean planting season is not far off.
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