Wednesday, April 25–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Investor risk appetite has waned a bit this week on some disappointing corporate earnings reports and worries about rising interest rates and inflation.
A feature in the marketplace recently has been rising world government bond yields. The U.S. Treasury 10-year note yield on Tuesday moved above 3.0%–the highest level in four years.
The key “outside markets” on Wednesday morning see the U.S. dollar index trading firmer. A look at several currency-pair charts reveals near-term strong-trending, and even “breakout” price moves that have occurred over the past couple weeks.
Nymex crude oil prices are slightly up and trading near $68.00 a barrel. The oil market is supported recently by stronger world economic growth and on some notions that the U.S. could pull out of a deal struck with Iran regarding its nuclear ambitions. If the U.S. slaps sanctions on Iran again, that would reduce Iran’s capacity to sell oil on the world market.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are modestly down in early U.S. trading. The bulls have lost their overall near-term technical advantage. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,639.75 and then at 2,650.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,616.00 and then at 2,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index December futures: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,538.75 and then at 6,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 6,467.25 and then at 6,450.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower and hit a two-month low overnight. Bears are in strong command. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 142 16/32 and then at 143 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 141 23/32 and then at the contract low of 141 14/32. 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 another contract and multi-year low overnight. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 119.09.0 and then at this week’s high of 119.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 118.31.0 and then at 118.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
U.S. DOLLAR INDEX
The June U.S. dollar index is higher and hit a 3.5-month high in early U.S. trading. 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 bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 90.885 and then at 91.000. Shorter-term support is seen at the overnight low of 90.515 and then at 90.295. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are modestly firmer in early U.S. trading. Bulls are in solid near-term technical control. Look for buy stops to reside just above technical resistance at $68.50 and then at $69.00. Look for sell stops just below technical support at this week’s low of $67.14 and then at $66.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were firmer overnight. Farmers will be getting in their fields at full speed later this week, planting corn and preparing for soybean planting. World supply-and-demand fundamentals favor the bulls for soybeans and corn, but favor the bears for wheat.