Friday, March 29–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Today is the last trading day of the week, of the month, and of the quarter, which makes it an extra important trading day from a charts and technical perspective. Traders and investors are exhibiting a bit more risk appetite late this week, which has buoyed world stock markets but has helped to sink the safe-haven gold and silver markets.
The U.S. and China held high-level trade talks in Beijing late Thursday and Friday. U.S. Treasury Secretary Steven Mnuchin said those talks were productive. However, Larry Kudlow, President Trump’s economic advisor, said on Thursday any final U.S.-China trade accord is likely to come months down the road. There is no clear consensus in the marketplace on the eventual outcome of the U.S.-China trade talks, which means that when any final result is announced it is likely to cause at least some volatility in some markets.
The U.K. Parliament is likely to vote Friday on another option offered by Prime Minister Theresa May to break the Brexit deadlock. There are not high expectations for her latest plan to be approved by the MPs. Today is the day the U.K. was set to leave the European Union. May’s options moving forward on the matter are increasingly limited, with speculation of a general election being held in the near future.
The key outside markets today see the U.S. dollar index higher and hitting another 2.5-week high today. The USDX is back near its recent multi-month high. Meantime, Nymex crude oil prices are higher and trading around $60.00 a barrel. Oil prices are still trending higher on the daily bar chart even though price action has been sideways this week.
U.S. economic reports due for release Friday include personal income and outlays, the Chicago ISM business survey, new residential sales and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading today. Bulls have the firm near-term technical advantage amid a price uptrend on the daily chart. 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 early today. Today, shorter-term technical resistance comes in at this week’s high of 2,835.00 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,789.50 and then at this week’s low of 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are modestly up in early U.S. trading. Bulls have the overall near-term technical advantage amid a price uptrend. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 7,400.00 and then at this week’s high of 7,447.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,325.00 and then at this week’s low of 7,276.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower early today on profit taking after hitting a contract high Thursday. Bulls still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 150 1/32 and then at the contract high of 150 21/32. Buy stops likely reside just above those levels. Shorter-term support lies at 149 even and then at 148 25/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading on profit taking. Prices Wednesday hit a contract high. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 124.14.5 and then at 124.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.04.0 and then at 124.00.0. 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 near steady and hit a 2.5-week high overnight. Bulls have the solid overall near-term technical advantage and have gained more power late this week. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.910 and then at the March high of 97.160. Shorter-term support is seen at Thursday’s low of 96.360 and then at 96.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
May Nymex crude oil prices are higher in early U.S. trading. Bulls have the 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 March high of $60.39 and then at $61.00. Look for sell stops just below technical support at the overnight low of $59.41 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were again mixed overnight. Traders will closely examine this morning’s USDA U.S. planting intentions and quarterly grain stocks reports. These two reports are some of the most important USDA releases of the year. Volatility will pick up markedly in the grain futures markets after the 11:00 a.m. CDT reports are out.
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