Friday, March 1–Jim Wyckoff’s morning markets report
In overnight news, China’s official purchasing managers indexes in February showed little change in the pace of expansion. Manufacturing remaining in contraction for the fifth straight month, while growth in services up-ticked in February. China’s manufacturing purchasing managers index (PMI) was
49.1 in February versus 49.2 in January and a 49.0 reading expected. The services PMI was 51.4 versus 50.7 January and 50.7 forecast. The composite PMI was 50.9, the same as in January. Readings below 50.0 suggest contraction in the sector.
In other news, the Euro zone consumer price index for February came in at up 2.6%, year-on-year, versus up 2.8% in January and a forecast for up 2.5%. The core CPI was up 3.1%.
The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are higher and trading around $79.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.223%.
U.S. economic data due for release Friday includes the U.S. manufacturing PMI, the ISM report on business manufacturing, the global manufacturing PMI, domestic auto industry sales, construction spending and the University of Michigan consumer sentiment survey.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading but are just below last week’s contract and record high. Bulls have the solid overall near-term technical advantage. Prices are in a four-month-old uptrend on the daily bar chart. The shorter-term moving averages (4-day, 9-day and 18-day) are bullish early today. The 4-day moving average is above 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 the contract high of 5,184.25 and then at 5,200.00. Support for active traders is seen at this week’s low of 5,121.00 and then at 5,075.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly up in early U.S. trading and hit a contract high overnight. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight contract high of 18,400.75 and then at 18,500.00. On the downside, shorter-term support is seen at 18,200.00 and then at this week’s low of 18,070.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly up 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 119 23/32 and then at 120 even. Shorter-term support lies at the overnight low of 118 22/32 and then at this week’s low of 118 6/32. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher 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 bullish early today. Shorter-term resistance lies at the overnight high of 110.23.5 and then at 111.00.0. Shorter-term technical support is seen at the overnight low of 110.08.0 and then at 110.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are slightly higher in early U.S. trading. Bears have the overall near-term technical advantage. 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 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 this week’s high of 1.0916 and then at last week’s high of 1.0937. Shorter-term support is seen at this week’s low of 1.0844 and then at 1.0800. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are higher in early U.S. trading. 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 bullish 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 the overnight low of $78.05 and then at $77.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed but mostly weaker overnight. Charts are still bearish for corn, wheat, soybeans, meal and bean oil. All the grain markets are trending down on the daily bar charts. However, my bias is that market bottoms in the grains are not far off.
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