Monday, April 1–Jim Wyckoff’s morning markets report
Stock and financial markets overnight are buoyed by last Friday’s report that the U.S. PCE price Index was up 0.3% in February compared to the previous month. The rise was slightly lower than the revised 0.4% increase in January and fell short of market forecasts for a 0.4% increase. The annual rate of PCE inflation rose marginally from 2.4% to 2.5%, aligning with forecasts. However, when considering the monthly core PCE inflation, which excludes volatile components such as food and energy and is a preferred measure of inflation by the Federal Reserve, there was a deceleration. The core PCE inflation rate slowed to a 0.3% rise from a revised 0.5% rise in January, matching the anticipated rate. This report favors the U.S. monetary policy doves, who want to see the Federal Reserve cut interest rates sooner rather than later.
Gold prices overnight surged to a record high of $2,264.20 an ounce, basis nearby Comex futures.
In overnight news, China’s manufacturing purchasing managers index (PMI) for March came in at 50.8 from 49.1 in February and beat market expectations. A reading above 50.0 suggests expansion in the sector. Reads a Wall Street Journal headline today: “China’s manufacturing data reflect upturn, but host of hurdles remain.”
U.S. economic reports due for release Monday include the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing and construction spending.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher and hit a contract and record high overnight. 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 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 bullish early today. Today, shorter-term technical resistance comes in at 5,350.00 and then at 5,375.00. Support for active traders is seen at 5,300.00 and then at last week’s low of 5.271.25. Wyckoff’s Intra-day Market Rating: 6.5
June Nasdaq index futures: Prices are higher in early U.S. trading and not far 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 neutral to bullish early today. Shorter-term technical resistance is seen at the contract high of 18,709.00 and then at 18,800.00. On the downside, shorter-term support is seen at 18,500.00 and then at last week’s low of 18,414.75. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. 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 early today. Shorter-term technical resistance is seen at last week’s high of 120 20/32 and then at 121 even. Shorter-term support lies at last week’s low of 119 2/32 and then at the March low of 118 3/32. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly 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 neutral to bullish early today. Shorter-term resistance lies at last week’s high of 110.31.5 and then at 111.10.0. Shorter-term technical support is seen at last week’s low of 110.11.5 and then at 110.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are slightly lower in early U.S. trading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.0862 and then at last week’s high of 1.0901. Shorter-term support is seen at 1.0800 and then at 1.0750. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are slightly lower in early U.S. trading after hitting a five-month 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $86.62 and then at $85.00. Look for sell stops just below technical support at $82.00 and then at $80.55. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were mixed overnight. The planting intentions report and the quarterly grain stocks report, out last Thursday, was bullish for corn. 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