Tuesday, April 2–Jim Wyckoff’s morning markets report
Featured in the marketplace early this week is rising U.S. Treasury yields following recent strong U.S. economic data, including Monday’s stronger-than-expected ISM manufacturing report. That has given the U.S. monetary policy doves some pause on their notions of an interest rate cut coming as early as June.
In overnight news, an air strike on the consular part of Iran’s embassy in Damascus, Syria, killed three senior members of Iran’s Revolutionary Guards. Iran blamed Israel for the strike. This is another escalation in the already-turbulent Middle East. Gold rose to another record high overnight, partly due to safe-have demand amid heightened geopolitical tensions.
In other news, the Japanese yen sank to a 34-year low against the U.S. dollar today. Reads a DowJones Newswires headline today: “Yen intervention risk is rising, but effects could be short-lived.”
U.S. economic reports due for release Tuesday include the Johnson Redbook weekly retail sales report, manufacturers’ shipments and inventories, the JOLTS survey, the global manufacturing PMI, and domestic auto industry sales. Several Federal Reserve officials are also slated to speak today.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading after hitting a contract and record high Monday. 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 even with the 9-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 the contract high of 5,333.50 and then at 5,375.00. Support for active traders is seen at last week’s low of 5.271.25 and then at 5,250.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly lower in early U.S. trading and not far below the recent record high. 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. The 9-day is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 18,500.00 and then at the contract high of 18,709.00. On the downside, shorter-term support is seen at last week’s low of 18,414.75 and then at 18,300.00. 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 five-week low in early U.S. trading. Bulls are fading. 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 118 26/32 and then at 119 even. Shorter-term support lies at 118 even and then at the February low of 117 11/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are down 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. 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 110.03.0 and then at 110.16.0. Shorter-term technical support is seen at the March low of 109.24.5 and then at 109.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are slightly higher in early U.S. trading after hitting a six-week low overnight. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.0833 and then at last week’s high of 1.0901. Shorter-term support is seen at the overnight low of 1.0758 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
May Nymex crude oil prices are higher in early U.S. trading and hitting a five-high low overnight. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $85.46 and then at $87.00. Look for sell stops just below technical support at the overnight low of $83.85 and then at this week’s low of $82.60. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
Grain futures prices were mixed overnight. 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