Daily Morning Report

Friday, February 9–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mixed to lower overnight, following sharp losses in the U.S. stock indexes Wednesday. U.S. stock indexes are pointing toward firmer openings then the New York day session begins. Look for more high volatility on this last trading day of the week.

The U.S. government briefly shut down overnight but lawmakers quickly reached another continuing resolution deal to reopen it.

In other news, it was reported that China will launch its new crude oil futures contract on March 26. China, the world’s largest oil importer, is aiming to grab a share of the world oil pricing market.

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Thursday, February 8–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mixed to lower overnight, following losses in the U.S. stock indexes Wednesday. U.S. stock indexes are pointing toward mixed openings then the New York day session begins. Serious near-term technical damage has been inflicted on the U.S. stock indexes recently, to suggest they have finally topped out for at least the near term.

In overnight news, the Chinese yuan dropped by around 1% against the U.S. dollar for its biggest daily decline since the yuan was devalued in 2015.

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The U.S. stock indexes have suffered major technical damage recently, to suggest market tops are in place. Tuesday’s gains did not repair that damage. More downside price pressure is likely coming. Tuesday’s rebound in the U.S. stock market could be just a “dead-cat bounce” that many times occurs after a market has been mortally wounded. Indeed, the steep downdraft we have seen in stock indexes cannot just be swept under the rug by the equities bulls. Stay tuned!–Jim

Wednesday, February 7–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets posted solid rebounds overnight, following the lead of the U.S. stock indexes Tuesday. However, U.S. stock indexes are under solid selling pressure Wednesday morning, ahead of the U.S. day session. Serious near-term technical damage has been inflicted on the U.S. stock indexes recently, to suggest more selling pressure in the near term. Volatility is back in the stock and financial markets, after a long period of quieter daily trading.

Stalwart stock market bulls are blaming algorithmic traders for the steep sell-off, and pointing to solid economic fundamentals in place around the world as indicating this is just a downside correction in a still-bullish equities market. However, the fact of the matter is that traders/investors who entered the equities markets just a few months ago (and there are many) are now under water, or close to it. How much pain are these weak longs willing to suffer before they bail out on fear, or get washed out due to margin calls? Any analyst can pontificate about sound market fundamentals at present, but the traders and investors with skin in the game are more worried about losing their money than they are market fundamentals. In other words, trading markets is still a money game.

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Tuesday, February 6–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets tumbled sharply overnight, following the strong losses in the U.S. stock indexes Monday. The Dow Jones Industrial Average saw its largest point decline ever, at one point in afternoon trading Monday. However, percentage-wise, the drop did not come close to the 1987 crash. U.S. stock indexes are pointed toward solidly lower openings again, when the New York day session begins. Worries about rising interest rates and inflation worldwide have really spooked the global equities markets.

Somewhat ironically, world bond markets yields are falling Tuesday on some safe-haven demand from the steep downdraft in world stock markets. Still, don’t look for the world bond markets to make a sustainable recovery in prices.

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The U.S. Treasury bond and Treasury note futures markets have hit new contract lows in prices (rising yields) as worries about rising inflation and interest rates are gripping the world marketplace. The T-Bond and T-Note bears are in strong technical command, which suggests still more downside price pressure is coming in the near term, or longer. The big downdraft in the bond market is also suggesting the world stock markets are headed for some serious trouble, too. The beneficiaries of the big sell offs in stock and bond markets: hard assets like raw commodities. Stay tuned!–Jim