Friday, April 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed to firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. China’s markets were closed today. Traders and investors are still in a “risk-on” mentality following news that President Trump made positive remarks Thursday afternoon regarding a U.S.-China trade agreement being reached within the next four weeks. However Trump did not come right out and say a deal was done or set a date for a summit meeting with China President Xi Jinping. Many were thinking Trump would do that after his Thursday meeting with high-level China trade officials.
Market watchers are looking ahead to the U.S. Labor Department’s employment report for March, which is due out this morning. It’s arguably the most important economic data point of the month. The key non-farm payrolls number in the report is forecast to be up 175,000 in March, with the unemployment rate expected to remain at 3.8%. Wednesday’s precursor report, the ADP national employment report for March, showed a gain of 129,000 jobs, which was a significant downside miss. The payrolls number was forecast to be up 173,000. This suggests today’s more important jobs report could also be a miss to the downside.
In overnight news, markets did not react to reports that U.K. Prime Minister Theresa May has asked the European Union to delay is exit from the bloc until June 30.
President Trump on Thursday picked Herman Cain to become a member of the Federal Reserve board of governors. He needs to be confirmed by Congress. Cain is a proponent of U.S. monetary policy being tied to a “gold standard” and was with the Kansas City Federal Reserve in the 1990s.
The key outside markets today see the U.S. dollar index slightly lower. Meantime, Nymex crude oil prices are near steady and trading around $62.00 a barrel.
Other U.S. economic reports due for release Friday includes the consumer credit report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up in early U.S. trading today and very close to this week’s nearly 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 bullish early today. Today, shorter-term technical resistance comes in at 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 Wednesday’s low of 2,865.25 and then at this week’s low of 2,844.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a price uptrend and as prices are near this week’s 5.5-month high. 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 this week’s high of 7,616.25 and then at 7,650.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Wednesday’s low of 7,513.25 and then at 7,450.00. 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 lower and hit a two-week low early today. Bulls still have the overall near-term technical advantage but are fading and need to show fresh power soon. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 147 22/32 and then at 148 even. Buy stops likely reside just above those levels. Shorter-term support lies at 147 even and then at 146 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 lower and hit a two-week low in early U.S. trading. Bulls have the overall near-term technical advantage but are now fading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 123.17.5 and then at Thursday’s high of 123.22.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.10.0 and then at 123.05.0. 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 in early U.S. trading. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 97.095 and then at the March high of 97.160. Shorter-term support is seen at the overnight low of 96.810 and then at this week’s low of 96.525. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
May Nymex crude oil prices are slightly lower and not far below this week’s 4.5-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 bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $62.99 and then at $63.50. Look for sell stops just below technical support at $61.00 and then at this week’s low of $60.13. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were lower overnight. Traders were disappointed by the lack of a U.S.-China trade deal being sealed this week. Bears still have the overall near-term technical advantage in the grains. It’s very likely going to take a weather market in the Corn Belt in the coming few months to jumpstart any rallies in the grain markets. However, given Corn Belt weather recently, such seems increasingly likely.
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