Daily Morning Report

Thursday, February 18–Jim Wyckoff’s Morning Markets Report

Global stock markets were mixed but mostly weaker overnight. Mainland China markets were open Thursday after being closed several days for the Lunar New Year holiday. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. There is still scant risk aversion in the marketplace at present and that’s bullish for equities.

However, rising government bond yields are a focus of the marketplace this week and that competing asset does have the  stock market bulls a bit worried. The U.S. Treasury 10-year note reached its highest yield in a year earlier this week and is currently fetching 1.282%. If U.S. Treasury yields continue to rise, investors would be more inclined lock in those higher returns. For perspective, the German 10-year bond (bund) yield stands at -0.359% and the U.K. bond (gilt) yield is 0.585%.

Copper futures prices hit a nine-year high Thursday, as the red industrial metal is surging on ideas of strong demand in the coming months as major economies shift into high gear with the pandemic likely tamped down.

The key “outside markets” today see the U.S. dollar index trading lower. Meantime, Nymex crude oil futures prices are slightly lower and trading around $61.00 a barrel.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, the new house price index, new residential construction and building permits, import and export prices, and the weekly DOE liquid energy stocks report.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are lower in early U.S. trading, on profit taking after hitting a contract and record high Tuesday. Bulls still have the strong overall near-term technical advantage. The 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 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 3,936.00 and then at the record high of 3,959.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 3,896.50 and then at 3,878.00. Wyckoff’s Intra-day Market Rating: 4.0

March Nasdaq index futures: Prices are down on profit taking after hitting a record high Tuesday. Bulls still 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 bearish early today. Shorter-term technical resistance is seen at overnight high of 13,723.25 and then at 13,800.00. On the downside, shorter-term support is seen at this week’s low of 13,543.00 and then at 13,400.00. 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 hit a contract low on Wednesday. Bears have the solid overall near-term technical advantage. 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 165 8/32 and then at this week’s high of 165 28/32. Shorter-term support lies at 164 even and then at the contract low of 163 17/32. Wyckoff’s Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are slightly down in early U.S. trading. Prices hit a contract low Wednesday. 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 136.02.0 and then at 136.08.0. Shorter-term technical support lies at 135.24.0 and then at 135.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

EURO CURRENCY

The March Euro currency futures are higher in early U.S. trading. Bulls have the slight overall near-term technical advantage but trading has been choppy. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.2112 and then at 1.2150. Shorter-term support is seen at this week’s low of 1.2029 and then at 1.2000. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

March Nymex crude oil prices are near steady in early U.S. trading and hit a 13-month high overnight. Bulls have the solid overall near-term technical advantage amid a price uptrend firmly 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $62.26 and then at $63.00. Look for sell stops just below technical support at this week’s low of $59.43 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

U.S. grain futures are mixed to weaker in early U.S. pre-market trading. The bulls still have the firm overall near-term technical advantage as prices are not trading too far below their recent highs. Overall supply and demand fundamentals are bullish for the grains. Right now the path of least resistance for grain prices remains sideways to higher.

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

Wednesday, February 17–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly firmer overnight. Mainland China markets remain closed for the Lunar New Year holiday but will open Thursday. U.S. stock indexes are pointed toward steady to weaker openings and new record highs when the New York day session begins. There remains little risk aversion in the marketplace, what with the pandemic loosening its grip on many major countries and economies expected to rebound strongly as this year progresses.

It’s a very busy day for U.S. economic data Wednesday, including the weekly MBA mortgage applications survey, the weekly Johnson Redbook and Goldman Sachs retail sales reports, retail sales, the producer price index, industrial production and capacity utilization, manufacturing and trade inventories, the NAHB housing market index and the FOMC minutes.

Bitcoin hit another record high overnight and traded well above $50,000. The keener investor interest in Bitcoin and other crypto currencies could be taking away some of the allure for historical safe-haven assets gold and silver.

The platinum futures market this week hit a 6.5-year high. An email dispatch from the broker SP Angel said the following: “Europe takes the lead in the race for hydrogen in a move which will likely drive platinum prices higher. Most of the world’s planned hydrogen projects and the biggest chunk of related investments this decade are expected to be in Europe. The EU has made hydrogen a key plank in its aim to eliminate greenhouse gas emissions by 2050, with plans to install 40GW of electrolyzers this decade. Of the 228 hydrogen projects announced globally, 55% of them (126) are in Europe. Hydrogen Council members–including Royal Dutch Shell Plc, BMW, Microsoft Corp and Sinopec–plan to increase hydrogen investments six-fold through to 2025, from 2019 levels. Platinum catalysts for reforming hydrogen and for fuel cells are likely to see increasing demand from the new drive to produce and use hydrogen.”

The key “outside markets” today see the U.S. dollar index trading higher. Meantime, Nymex crude oil futures prices are firmer and trading around $60.75 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching around 1.3%–the highest level in a year.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading after hitting a contract and record high Tuesday. Bulls have the strong overall near-term technical advantage. The 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 is above 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 record high of 3,959.25 and then at 3,980.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at 3,900.00 and then at 3,878.00. Wyckoff’s Intra-day Market Rating: 5.0

March Nasdaq index futures: Prices are slightly down after hitting a record high Tuesday. Bulls have the strong 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 bearish early today. Shorter-term technical resistance is seen at the contract high of 13,900.50 and then at 14,000.00. On the downside, shorter-term support is seen at the overnight low of 13,694.00 and then at 13,600.00. Wyckoff’s Intra-Day Market Rating: 5.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low overnight. Bears have the solid overall near-term technical advantage. 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 neutral to bullish early today. Shorter-term technical resistance is seen at 165 even and then at this week’s high of 165 28/32. Shorter-term support lies at 164 even and then at the overnight contract low of 163 17/32. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are slightly up and hit a contract low overnight. 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 to bullish early today. Shorter-term resistance lies at the overnight high of 135.28.5 and then at 136.00.0. Shorter-term technical support lies at the overnight contract low of 135.17.0 and then at 135.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

EURO CURRENCY

The March Euro currency futures are lower in early U.S. trading. Bulls have the slight overall near-term technical advantage. 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at 1.2100 and then at the overnight high of 1.2112. Shorter-term support is seen at 1.2050 and then at 1.2000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

March Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend firmly 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 neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $60.95 and then at $62.00. Look for sell stops just below technical support at the overnight low of $59.51 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 6.5

GRAINS

U.S. grain futures are mixed to weaker in early U.S. pre-market trading. The bulls still have the firm overall near-term technical advantage. Overall supply and demand fundamentals are bullish for the grains. Right now the path of least resistance for grain prices remains sideways to higher.

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

Tuesday, February 16–Jim Wyckoff’s Morning Markets Report

Global stock markets were mostly firmer overnight. Mainland China markets remain closed for the Lunar New Year holiday.  U.S. stock indexes are pointed toward higher openings and new record highs when the New York day session begins. U.S. markets were closed Monday for the President’s Day holiday. A U.S. big government stimulus package likely coming to Americans in the spring and falling rates of Covid-19 infections at the same time vaccinations in the U.S. are still ramping up have traders and investors still in a “risk-on” frame of mind early this week.

Reports early this week say China is considering limiting is “rare-earth” metal and mineral exports to the U.S.

In other overnight news, the Eurozone fourth-quarter GDP came in at down 0.6% from the third quarter and down 5.0%, year-on-year. Those numbers were just a bit better than expected.

Bitcoin prices hit another record high overnight and nearly hit $50,000 before backing off a bit.

The key “outside markets” today see the U.S. dollar index trading lower and hitting a three-week low. Meantime, Nymex crude oil futures prices are firmer and trading around $59.80 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching 1.25%.

U.S. economic data due for release Tuesday is light and includes the Empire State manufacturing survey.

–Jim

U.S. STOCK INDEXES

March S&P 500 e-mini futures: Prices are higher in early U.S. trading and hit a new contract high overnight. Bulls have the strong overall near-term technical advantage. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 3,975.00 and then at 4,000.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,934.75 and then at 3,900.00. Wyckoff’s Intra-day Market Rating: 7.0

March Nasdaq index futures: Prices are higher and hit a record high in early U.S. trading. Bulls have the strong 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 overnight contract high of 13,900.50 and then at 14,000.00. On the downside, shorter-term support is seen at the overnight low of 13,810.00 and then at 13,700.00. Wyckoff’s Intra-Day Market Rating: 7.0.

U.S. TREASURY BONDS AND NOTES FUTURES

March U.S. T-Bonds: Prices are sharply lower in early U.S. trading and hit a contract low. Bears have the solid overall near-term technical advantage. 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 165 28/32 and then at 166 even. Shorter-term support lies at the overnight contract low of 164 20/32 and then at 164 10/32. Wyckoff’s Intra-Day Market Rating: 3.0

March U.S. T-Notes: Prices are sharply down and hit a four-week low in early U.S. trading. Prices are also very close to the contract 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 bearish early today. Shorter-term resistance lies at the overnight high of 136.15.0 and then at 136.20.0. Shorter-term technical support lies at the contract low of 136.01.5 and then at 136.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5

EURO CURRENCY

The March Euro currency futures are higher and hit a three-week high in early U.S. trading. Bulls have the overall near-term technical advantage. 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 1.2200 and then at 1.2250. Shorter-term support is seen at the overnight low of 1.2123 and then at 1.21000. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

March Nymex crude oil prices are higher and hit a 13-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend firmly 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 neutral early today. Look for buy stops to reside just above technical resistance at the overnight high of $60.95 and then at $62.00. Look for sell stops just below technical support at $59.00 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 6.5

GRAINS

U.S. grain futures are up in early U.S. pre-market trading. The bulls have the firm overall near-term technical advantage and are showing just enough resilience at higher price levels to keep the bears at bay. Overall supply and demand fundamentals are bullish for the grains. Right now the path of least resistance for grain prices remains sideways to higher.

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