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.
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
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
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.