Friday, January 28–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. It’s been a wobbly week for the global stock markets. Risk aversion has receded a bit heading into the weekend. The Russia-Ukraine tensions may be easing just a bit. Meantime, the marketplace has mostly digested this week’s hawkish FOMC meeting.
In other news, the International Monetary Fund reports China’s economic imbalances have worsened. The IMF forecast China’s GDP growth at 4.8% in 2022, down from its previous forecast of 5.7% growth.
Gold and silver prices are taking it on the chin this week. Gold is down almost $70 an ounce from the early week two-month high. Silver prices are down over $2.00 an ounce from a two-month high hit last week.
The key outside markets today see crude oil prices firmer and trading around $87.20 a barrel after hitting a seven-year high on Thursday. The U.S. dollar index is higher and hit a 1.5-year high overnight. The U.S. Treasury 10-year note yield is presently fetching 1.843% and near a two-year high. For perspective, the German 10-year bond (bund) is yielding -0.046% and the 10-year U.K. gilt is at 1.248%.
U.S. economic data due for release Friday includes personal income and outlays, the employment cost index and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Prices are trending lower on the daily chart, to suggest a market top is in place. 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 neutral to bearish early today. Today, shorter-term technical support comes in at Thursday’s low of 4,263.25 and then at this week’s low of 4,212.75. Sell stops likely reside just below those levels. Resistance for active traders is seen at the overnight high of 4,356.25 and then at 4,400.00. Buy stops likely reside just above those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are near steady in early U.S. trading. Prices are trending lower on the daily chart to suggest a market top is in place. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 14,183.50 and then at Thursday’s high of 14,409.25. On the downside, shorter-term support is seen at Thursday’s low of 13,844.50 and then at this week’s low of 13,706.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Prices have been trending lower for seven weeks. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 155 15/32 and then at 155 27/32. Shorter-term support lies at the overnight low of 154 20/32 and then at this week’s low of 153 29/32. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower 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 bearish early today. Shorter-term resistance lies at the overnight high of 127.22.0 and then at 127.28.0. Shorter-term technical support lies at this week’s low of 127.06.5 and then at the contract low of 127.02.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are slightly lower and hit a 22-month low in early U.S. trading. Bears have the solid overall near-term technical advantage and have gained power this week. 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 bearish early today. The Euro currency finds shorter-term technical resistance at 1.1200 and then at Thursday’s high of 1.1253. Shorter-term support is seen at the overnight low of 1.1130 and then at 1.1100. 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 seven-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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $88.54 and then at $89.00. Look for sell stops just below technical support at $86.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are higher in early U.S. pre-market trading. The corn and soybean markets are being supported by very dry weather in South American growing regions. Corn and bean bulls have the solid overall near-term technical advantage. Wheat prices have faded again but the bulls still have the overall near-term technical advantage. The “inflation trade” is working in favor of the grain market bulls.
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