Wednesday, April 17–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward modestly higher openings and near Tuesday’s six-month highs when the New York day session begins. The U.S. indexes are closing in on their record highs scored last fall.
Investors and traders continue to exhibit “risk-on” mentalities, as evidenced by the world stock markets trending higher and safe-haven gold and silver prices trending lower.
China’s gross domestic product report came out Wednesday and showed slightly better-than-expected growth of 6.4% in the first quarter, year-on-year. Stronger industrial production and retail sales were cited as boosting GDP. Most were expecting upbeat numbers just north of 6% annual GDP growth for the world’s second-largest economy.
In other overnight news, the Euro zone consumer price index for March showed a rise of 1.0% from February but was up only 1.4% year-on-year. Meantime, the U.K. CPI came in at up 0.2% in March and up 1.9% year-on-year. This continues a theme of very tame inflation in the world’s major economies.
An important change in market psychology has occurred just the past few weeks. Government bond yields in the world’s major economies are on the rise, after seeing their yields decline the first two months of the year. This is due in part to little risk aversion in the marketplace that is seeing monies flow into stock markets, which in turn prompts bond yields to rise in order to attract investor buying interest.
The key outside markets today find the U.S. dollar index weaker. Meantime, Nymex crude oil prices are higher and trading around $64.50 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the international trade report, monthly wholesale trade, the Federal Reserve’s beige book and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading today. Bulls have the solid near-term technical advantage amid a price uptrend on the daily chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s six-month high of 2,921.45 and then at 2,935.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,900.50 and then at last week’s low of 2,877.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher and hit another six-month high overnight. Bulls have the solid overall near-term technical advantage amid a price uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the October high of 7,767.00 and then at 7,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,668.50 and then at this week’s low of 7,598.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower and hit a four-week low early today. Bulls are fading badly as a downtrend has formed on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below with the 9-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 146 17/32 and then at 147 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 146 even and then at 145 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker and hit a four-week low in early U.S. trading. Bulls are fading amid a price downtrend in place on the daily bar chart. 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 122.30.0 and then at 123.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.20.5 and then at 122.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower early today. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.785 and then at 96.860. Shorter-term support is seen at last week’s low of 96.365 and then at 96.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are firmer in early U.S. trading today. Bulls have the firm near-term technical advantage and are keeping a gentle uptrend in place on the daily bar chart. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the April high of $64.79 and then at $65.00. Look for sell stops just below technical support at $64.00 and then at this week’s low of $62.99. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were firmer overnight on short covering following Tuesday’s losses. Grain market bears still have the firm overall near-term technical advantage. Focus is turning to U.S. Corn Belt weather, which has been cold and wet recent weeks, with more precip forecast for this week, which is going to cause field work and possibly corn-planting delays.
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