Friday, February 5–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward higher openings and record highs when the New York day session begins. Once again, the U.S. stock index bulls have shown keen resilience in coming right back from recent solid losses, to keep their longer-term price uptrends alive and well. Trader/investor risk sentiment continues upbeat. The Biden administration is working to get fresh stimulus funds to Americans and such will likely occur in the coming weeks. Also, new Covid 19 cases and hospitalizations in the U.S. are ticking down a bit, suggesting the virus may have already peaked.
On tap today is the U.S. employment situation report for January, arguably the most important U.S. data point of the month, and is expected to show a non-farm payrolls rise of 50,000 and an unemployment rate of 6.7%. A big miss in the numbers would likely move the markets at least a bit.
A theme that may be flying under the radar of much of the marketplace is the recent change in near-term price trends for the major currencies. In the past month, the U.S. dollar index has been trending higher, while currencies like the Euro common currency, Australian and Canadian dollars, the Swiss Franc and the Japanese yen have been trending down against the greenback.
The key “outside markets” today see the U.S. dollar index a bit weaker after hitting a two-month high Thursday. Meantime, Nymex crude oil futures prices are higher, hit a 12-month high, and are trading around $56.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.136%.
Other U.S. economic data due for release Friday includes the international trade in goods and services report and the consumer credit report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading and hit a new record high. Bulls have the solid 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 above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 3,900.00 and then at 3,925.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,860.00 and then at 3,830.00. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are higher in early U.S. trading and hit a new record high. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 contract high of 13,618.75 and then at 13,750.00. On the downside, shorter-term support is seen at 13,500.00 and then at 13,400.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower and hit a contract low in early U.S. trading. Bears have the solid overall near-term technical advantage and have downside momentum. 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 167 23/32 and then at 168 even. Shorter-term support lies at the overnight contract low of 167 even and then at 166 16/32. Wyckoff’s Intra-Day Market Rating: 3.0
March U.S. T-Notes: Prices are lower in early U.S. trading. 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 136.29.5 and then at 137.00.5. Shorter-term technical support lies at this week’s low of 136.19.0 and then at 136.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are near steady and hit another two-month low in early U.S. trading. Prices are trending lower and the bears have the near-term chart advantage. 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 neutral early today. The Euro currency finds shorter-term technical resistance at 1.2000 and then at Thursday’s high of 1.2052. Shorter-term support is seen at the overnight low of 1.1960 and then at 1.1900. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
March Nymex crude oil prices are higher and hit a 12-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $57.09 and then at $58.00. Look for sell stops just below technical support at $56.00 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are mixed to firmer in early U.S. pre-market trading. The bulls have the firm overall near-term technical advantage. Focus is on strong worldwide demand for grains. There are no strong, early chart clues to suggest market tops are close at hand. Supply and demand fundamentals are bullish for the grains.
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