Friday, February 4–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The features so far this week have been corporate earnings reports, including a downside miss on earnings by Meta (Facebook). Amazon’s earnings were solid, however. Focus Friday is on the important U.S. Labor Department employment situation report this morning. That report is also expected to be downbeat, with its key non-farm payrolls number expected to come in up only 150,000 jobs in January. A miss on that number will likely cause some volatility in some markets, at least initially.
Central bank policies remain near the front burner of the marketplace. The Euro currency posted strong gains Thursday in the wake of the European Central Bank unexpectedly leaning more hawkish on its monetary policy, in remarks from ECB President Christine Lagarde after Thursday’s regular ECB meeting. Meantime, the U.S. Federal Reserve appears to be continuing to lean more hawkish, not wanting to get farther behind the curve on fighting inflation.
The key outside markets today see crude oil prices higher and trading around $91.75 a barrel. That’s a seven-year high. Oil traders are now eyeing $100-a-barrel crude in the not-too-distant future. The U.S. dollar index is weaker today and the bears have had a good week. The U.S. Treasury 10-year note yield is presently fetching 1.817%.
There is no other for U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading, on a corrective pullback from this week’s good gains. 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 below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,528.00 and then at Thursday’s high of 4,548.25. Support for active traders is seen at 4,425.00 and then at this week’s low of 4,395.50. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 14,825.75 and then at 15,000.00. On the downside, shorter-term support is seen at this week’s low of 14,353.25 and then at 14,200.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading. Bears still have the firm overall near-term technical advantage. Trading has been sideways at lower levels for two weeks. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 156 even and then at this week’s high of 156 17/32. Shorter-term support lies at this week’s low of 154 9/32 and then at 153 29/32. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 128.00.0 and then at this week’s high of 128.11.5. Shorter-term technical support lies at the overnight low of 127.14.0 and then at 127.06.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are higher and hit a three-week high in early U.S. trading. Bears still have the overall near-term technical advantage. However, the bulls have made a strong run this week, to suggest a market bottom is now in place. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the January high of 1.1495 and then at 1.1550. Shorter-term support is seen at the overnight low of 1.1440 and then at 1.1400. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are solidly higher and hit another seven-year high in early U.S. trading. Bulls have the strong overall near-term technical advantage amid a two-month-old price uptrend in place on the daily 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $92.16 and then at $93.00. Look for sell stops just below technical support at the overnight low of $90.07 and then at $89.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
U.S. grain futures are firmer in early U.S. pre-market trading. Soybean and corn market bulls have the solid overall near-term technical advantage. Wheat bulls and bears are on a level overall naer-term technical playing field amid choppy trading. Wheat bears do have momentum on their side. For corn and soybeans, bulls must remember that a strong bull market must be fed fresh fundamental inputs often. One has to wonder of the current, known fundamentals in the corn and soybean markets are now fully factored into futures prices.
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