Thursday, February 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. stock index bulls are still having a good week. Generally upbeat U.S. corporate earnings reports are boosting trader and investor confidence. China’s markets are closed this week for the Lunar New Year holiday.
In overnight news, the Bank of England is expected to raise its key interest rates at its regular monetary policy meeting Thursday. Meantime, the European Central Bank at its meeting today is expected to hold its rates steady, for now.
In other news, the Euro zone got some hot inflation data overnight. Its December producer price index came in at up 26.2%, year-on-year, mainly because of rising energy costs. Still, excluding energy the PPI was up 10%, year-on-year.
The important U.S. Labor Department employment situation report is due out Friday morning. That report is also expected to be downbeat, with its key non-farm payrolls number expected to come in up only 150,000 jobs in January.
The key outside markets today see crude oil prices lower and trading around $87.00 a barrel. An OPEC-plus meeting Wednesday saw the cartel raise its collective oil production level by 400,000 barrels a day. The U.S. dollar index is higher today. The U.S. Treasury 10-year note yield is presently fetching 1.774%.
It is a busy day for U.S. economic data released Thursday, including the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, the U.S. services PMI, the ISM report on business services, manufacturers’ shipments and inventories, the global services PMI, and the monthly chain store sales index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are solidly lower in early U.S. trading, on a corrective pullback from this week’s strong gains. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,548.45 and then at this week’s high of 4,586.00. Support for active traders is seen at 4,500.00 and then at Wednesday’s low of 4,474.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are solidly down in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 14,870.00 and then at 15,000.00. On the downside, shorter-term support is seen 14,600.00 and then at 14,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. Trading has been sideways at lower levels for two weeks. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 156 5/32 and then at this week’s high of 156 17/32. Shorter-term support lies at this week’s low of 154 25/32 and then at 154 15/32. 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 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 resistance lies at the overnight high of 128.07.5 and then at this week’s high of 128.11.5. Shorter-term technical support lies at this week’s low of 127.21.5 and then at 127.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are weaker in early U.S. trading. Bears have the firm 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. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1340 and then at 1.1380. Shorter-term support is seen at Wednesday’s low of 1.1275 and then at Tuesday’s low of 1.1230. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are lower in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a two-month-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 bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $88.14 and then at this week’s high of $88.87. Look for sell stops just below technical support at this week’s low of $86.55 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading, on some profit taking and corrective pullbacks. Soybean and corn market bulls may now be exhausted and need to pause after recent strong gains. Corn and bean bulls still have the solid overall near-term technical advantage. Wheat prices have been choppy but the bulls are fading again. On tap today is the weekly USDA export sales report.
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