Friday, February 24–Jim Wyckoff’s morning markets report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk appetite this week has not been keen, as the U.S. stock indexes hit multi-week lows on Thursday. It seems that this week it may have finally sunk into the general marketplace that the U.S. will keep its monetary policy tighter for longer, in order to successfully tamp down problematic inflation.
The U.S. data point of the day Friday is the personal income and outlays report for January and its PCE price index component. The PCE core price index is forecast to come in at up 4.4%, year-on-year, which compares with up 4.4% in the December report.
The key outside markets this morning see the U.S. dollar index higher. Nymex crude oil futures prices are firmer and trading around $75.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.895%.
U.S. economic data due for release Friday includes personal income and outlays, new residential sales and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices Thursday hit a four-week low. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,089.25 and then at 4,150.00. Support for active traders is seen at this week’s low of 3,974.25 and then at 3,950.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading. Prices Thursday hit a three-week low. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 12,261.00 and then at this week’s high of 12,417.75. On the downside, shorter-term support is seen at this week’s low of 12,028.50 and then at 11,800.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Prices Thursday hit a three-month low. 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 early today. Shorter-term technical resistance is seen at the overnight high of 125 12/32 and then at this week’s high of 125 30/32. Shorter-term support lies at this week’s low of 123 26/32 and then at 123 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Prices Thursday hit a three-month low. 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 early today. Shorter-term resistance lies at the overnight high of 111.19.0 and then at 111.28.0. Shorter-term technical support is seen at this week’s low of 110.25.5 and then at 110.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are lower and hit a six-week low in early U.S. trading. Prices are in a fledgling downtrend on the daily bar chart. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-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 Wednesday’s high of 1.0676 and then at this week’s high of 1.0718. Shorter-term support is seen at 1.0550 and then at 1.0500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly higher in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is even with 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 Wednesday’s high of $76.55 and then at this week’s high of $77.74. Look for sell stops just below technical support at this week’s low of $73.80 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were mixed overnight. On tap today is the weekly USDA export sales report. Soybean market bulls have the solid overall near-term technical advantage. Corn bulls have lost their chart advantage after solid losses Thursday. Wheat futures bears have the firm overall chart 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