Thursday, April 11–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
The marketplace is this week digesting economic data on several fronts that suggest world economic growth is slowing down and that the major central banks of the world will refrain from raising interest rates and could even ease their monetary policies. This theme is a mixed bag for stock markets but should be bullish for world government bond prices. U.S. first-quarter corporate earnings reports are starting to come out, with many expecting a generally downbeat theme to emerge.
In overnight news, China’s consumer inflation was reported rising in March, at up 2.3%, year-on-year, versus a reading of up 1.5% in February. China’s producer price index was up 0.4% in March versus up 0.1% in February, year-on-year.
On the Brexit front, European Union officials met Wednesday to discuss extending a window for the U.K. to leave the bloc. The EU officials granted the U.K. an extension until Oct. 31. Now, U.K. Prime Minister Theresa May has six months to forge a deal with Parliament on a “soft Brexit.”
The key outside markets today find the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are weaker and trading around $64.00 a barrel. The International Energy Agency today said global oil output declined in March by 530,000 barrels per day.
U.S. economic reports due for release Wednesday include the weekly jobless claims report and the producer price index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading today, and near this week’s six-month high. 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 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 high of 2,900.00 and then at 2,915.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,877.25 and then at 2,860.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly up in early U.S. trading and hit a six-month high overnight. Bulls have the firm 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 overnight high of 7,661.00 and then at 7,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,600.00 and then at this week’s low of 7,561.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady early today. Bulls have the overall near-term technical advantage amid choppy 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 technical resistance is seen at this week’s high of 148 17/32 and then at 149 even. Buy stops likely reside just above those levels. Shorter-term support lies at 148 even and then at this week’s low of 147 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage amid choppy 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 this week’s high of 123.29.5 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.17.0 and then at this week’s low of 123.13.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is near steady today as the index has seen a corrective pullback this week. Bulls still 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 neutral to bearish early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 96.840 and then at this week’s high of 97.020. Shorter-term support is seen at this week’s low of 96.405 and then at 96.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
May Nymex crude oil prices are lower and not far below this week’s five-month high. 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 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 to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $64.79 and then at $65.00. Look for sell stops just below technical support at this week’s low of $63.13 and then at $62.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were again mixed overnight. Traders will closely examine this morning’s weekly USDA export sales report—especially to see what products China buys and how much. Grain market bears have the overall near-term technical advantage.
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