Wednesday, February 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. The U.S. stock indexes are pointed toward slightly weaker openings when the New York day session begins. An apparent slight de-escalation of the Russia-Ukraine border stand-off is somewhat lifting trader and investor risk sentiment at mid-week. Russia today said it has pulled back more if its troops from the Ukraine border. However, that situation is still very unpredictable and the geopolitical crisis is far from abating. President Biden on Tuesday said Russia still could invade Ukraine.
In other overnight news, higher-than-expected inflation in the U.K. has prompted talks of even more aggressive interest rate increases from the Bank of England. The U.K.’s January CPI rose by 5.5% year-on-year, above expectations of up 5.4%. The inflation report saw its steepest rise since March of 1992.
Meantime, China’s consumer price index for January came in at up 9.1%, year-on-year.
The yield on the U.S. 10-year Treasury note is presently fetching 2.035%. The key outside markets today see crude oil prices firmer and trading around $92.85 a barrel. The U.S. dollar index is lower today.
It’s a very busy day for U.S. economic data releases Wednesday, including retail sales, the MBA mortgage applications survey, import and export prices, industrial production and capacity utilization, the NAHB housing market index, the weekly DOE liquid energy stocks report, and the FOMC meeting minutes. The minutes may not provide much markets reaction as it appears the marketplace may have dialed in an aggressive Federal Reserve monetary-policy-tightening pace in the coming months.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 4,500.00 and then at 4,525.00. Support for active traders is seen at 4,400.00 and then at this week’s low of 4,354.00. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving below the 9-day and 18-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 14,750.00 and then at 15,000.00. On the downside, shorter-term support is seen at Tuesday’s low of 14,233.25 and then at this week’s low of 14,031.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly up in early U.S. trading. 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 early today. Shorter-term technical resistance is seen at Tuesday’s high of 152 7/32 and then at 153 even. Shorter-term support lies at the low of 150 18/32 and then at 150 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are slightly higher in early U.S. trading. 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 Tuesday’s high of 126.06.5 and then at 126.12.0. Shorter-term technical support lies at the contract low of 125.17.5 and then at 125.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1402 and then at 1.1450. Shorter-term support is seen at the overnight low of 1.1351 and then at Tuesday’s low of 1.1310. Wyckoff’s Intra Day Market Rating: 6.0
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 10-week-old 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 to bullish today. Look for buy stops to reside just above technical resistance at $95.00 and then at this week’s high of $95.82. Look for sell stops just below technical support at the overnight low of $91.63 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are higher in early U.S. pre-market trading, on a corrective bounce from Tuesday’s losses. Grain market bulls have the overall near-term technical advantage. The keener inflation worries are overall bullish for the grain markets.
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