Tuesday, March 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Bond market yields are on the retreat Tuesday, which is boosting trader and investor risk appetite and boosting share prices. The yield on the U.S. Treasury 10-year note was fetching 1.542% early today. Big hedge fund manager David Tepper on CNBC Monday predicted the rise in U.S. government bond yields has now mostly played out. Some other analysts on TV and in the media are saying the same. However, many just think Tepper and the others are just talking their book. This 35-year market watcher thinks the inflation genie is already out of the bottle.
The marketplace is also upbeat early this week as it appears the U.S. Congress will this week pass a $1.9 trillion pandemic stimulus package for Americans, to then be signed by President Biden.
Gold prices are sharply higher today on the falling bond yields and weaker U.S. dollar index, but mostly on a corrective bounce after hitting a 10-month low on Monday.
In overnight news, the Paris-based OECD think tank forecast the global economy will rebound to pre-pandemic growth levels by the middle of this year, at 5.6% growth, but warned that strong U.S. economic growth could unbalance weaker world economies. The OECD sees the U.S. economy growing by 6.5% in 2021—double the pace it forecast in November. The group forecast China’s economic growth in 2021 at 7.8%.
The key “outside markets” today see Nymex crude oil futures prices higher and trading around $65.65 a barrel. Meantime, the U.S. dollar index is lower on a corrective pullback after hitting a 3.5-month high Monday.
U.S. economic data due for release Tuesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the NFIB small business optimism index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage but trading has been choppy at higher levels. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,868.75 and then at 3,900.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,816.50 and then at Monday’s low of 3,786.50. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are sharply up in early U.S. trading. However, prices have been trending down for three weeks. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 12,600.00 and then at Monday’s high of 12,751.00. On the downside, shorter-term support is seen at 12,500.00 and then at 12,400.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly up in early U.S. trading on short covering from recent strong selling pressure. Bears still 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 the overnight high of 158 6/32 and then at 159 even. Shorter-term support lies at 157 even and then at the overnight low of 156 21/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are solidly higher in early U.S. trading on short covering. Shorter-term moving averages (4- 9- 18-day) are still 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 132.16.0 and then at 132.24.0. Shorter-term technical support lies at 132.00.0 and then at the contract low of 131.26.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are higher on short covering after hitting a four-month low overnight. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below 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 bullish early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.1957 and then at 1.2000. Shorter-term support is seen at 1.1900 and then at the overnight low of 1.1861. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
April Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a 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 neutral early today. Look for buy stops to reside just above technical resistance at $66.00 and then at $67.00. Look for sell stops just below technical support at the overnight low of $64.34 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are mixed in early U.S. pre-market trading. The data point of the week for the grain markets is today’s monthly USDA supply and demand report near midday. That report is expected to favor the bullish camps. Markets may remain choppy and sideways up until the late-March USDA planting intentions report, which is one of the most important grain market reports of the year. Grain market bulls still have the firm overall near-term technical advantage as prices are mostly trending up—both on a near-term and longer-term basis.
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