Thursday, February 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Traders and investors are still digesting the Federal Open Market Committee (FOMC) meeting that concluded Wednesday afternoon with a statement that made no changes in U.S. monetary policy. None were expected. The statement said the U.S. economy is gaining strength, to also suggest rising inflation. The market read the report as neutral to maybe just slightly hawkish. Gold prices rallied moderately in the wake of the FOMC statement, but other markets saw little reaction. That was Fed Chair Janet Yellen’s last FOMC meeting.
Traders are awaiting Friday morning’s monthly U.S. employment situation report from the Labor Department. This is arguably the most important U.S. data point of the month. The key non-farm payrolls number consensus forecast comes in at up 177,000.
The key “outside markets” on Thursday morning see the U.S. Dollar Index slightly lower. Meantime, Nymex crude oil prices are higher and trading just above $65.00 a barrel.
A busy slate of U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, the productivity and costs report, the U.S. manufacturing PMI, the ISM manufacturing report on business, construction spending, the global manufacturing PMI, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are firmer in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,858.00 and then at the contract high of 2,878.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,813.00 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are slightly higher in early U.S. trading. The bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 6,987.75 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,950.00 and then at this week’s low of 6,902.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower in early U.S. trading and close to this week’s 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. 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 148 even and then at 148 11/32. Buy stops likely reside just above those levels. Shorter-term support lies at the contract low of 147 3/32 and then at 147 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit another 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. 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 121.21.5 and then at 121.27.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 121.10.0 and then at 121.06.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
U.S. DOLLAR INDEX
The March U.S. dollar index is near steady in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.170 and then at this week’s high of 89.480. Shorter-term support is seen at this week’s low of 88.615 and then at last week’s low of 88.255. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
March Nymex crude oil prices are higher in early U.S. trading. Bulls still have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $65.50 and then at $66.00. Look for sell stops just below technical support at the overnight low of $64.63 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were weaker overnight, on downside corrections from recent good gains. Grain market bulls still have near-term technical momentum on their side, to suggest price uptrends can be sustained. The long bear market in the grains finally appears to have ended.