Monday, February 20–Jim Wyckoff’s morning markets report
In overnight news, reports said Houthi rebels continue to attack ships traversing the Red Sea.
In other news, China has lowered key interest rates for mortgages in an effort to jumpstart its troubled housing/property sector.
U.S. economic data due for release Tuesday is light and includes leading economic indicators.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading on profit taking and not far below the recent record high. Bulls have the solid overall near-term technical advantage. Prices are in a 3.5-month-old uptrend on the daily bar chart. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearsh early today. Today, shorter-term technical resistance comes in at the record high of 5,066.50 and then at 5,100.00. Support for active traders is seen at last week’s low of 4,936.50 and then at 4,900.00. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are lower in early U.S. trading but not far below the recent record high. Bulls have the solid overall near-term technical advantage. 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 17,807.50 and then at 18,000.00. On the downside, shorter-term support is seen at last week’s low of 17,542.00 and then at 17,400.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are near steady in early U.S. trading after hitting a 2.5-month low overnight. 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 bearish early today. Shorter-term technical resistance is seen at 119 20/32 and then at 120 even. Shorter-term support lies at the overnight low of 117 22/32 and then at 117 even. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Friday’s high of 110.07.5 and then at 110.17.5. Shorter-term technical support is seen at last week’s low of 109.15.0 and then at 109.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bears have the near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bullish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.0830 and then at 1.0900. Shorter-term support is seen at last week’s low of 1.0709 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading after hitting a 3.5-month high overnight. 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 $80.00 and then at $81.00. Look for sell stops just below technical support at $78.00 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed but mostly firmer overnight. On tap today the weekly USDA export inspections report. Not much has changed recently. Charts are fully bearish for corn, wheat, soybeans, meal and bean oil. All the grain markets are trending down on the daily bar charts.
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