Tuesday, February 16–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly firmer overnight. Mainland China markets remain closed for the Lunar New Year holiday. U.S. stock indexes are pointed toward higher openings and new record highs when the New York day session begins. U.S. markets were closed Monday for the President’s Day holiday. A U.S. big government stimulus package likely coming to Americans in the spring and falling rates of Covid-19 infections at the same time vaccinations in the U.S. are still ramping up have traders and investors still in a “risk-on” frame of mind early this week.
Reports early this week say China is considering limiting is “rare-earth” metal and mineral exports to the U.S.
In other overnight news, the Eurozone fourth-quarter GDP came in at down 0.6% from the third quarter and down 5.0%, year-on-year. Those numbers were just a bit better than expected.
Bitcoin prices hit another record high overnight and nearly hit $50,000 before backing off a bit.
The key “outside markets” today see the U.S. dollar index trading lower and hitting a three-week low. Meantime, Nymex crude oil futures prices are firmer and trading around $59.80 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching 1.25%.
U.S. economic data due for release Tuesday is light and includes the Empire State manufacturing survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading and hit a new contract high overnight. Bulls have the strong overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 3,975.00 and then at 4,000.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,934.75 and then at 3,900.00. Wyckoff’s Intra-day Market Rating: 7.0
March Nasdaq index futures: Prices are higher and hit a record high in early U.S. trading. Bulls have the strong 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 and 18-day. The 9-day average 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 13,900.50 and then at 14,000.00. On the downside, shorter-term support is seen at the overnight low of 13,810.00 and then at 13,700.00. Wyckoff’s Intra-Day Market Rating: 7.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are sharply lower in early U.S. trading and hit a contract low. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 165 28/32 and then at 166 even. Shorter-term support lies at the overnight contract low of 164 20/32 and then at 164 10/32. Wyckoff’s Intra-Day Market Rating: 3.0
March U.S. T-Notes: Prices are sharply down and hit a four-week low in early U.S. trading. Prices are also very close to the contract low. 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 136.15.0 and then at 136.20.0. Shorter-term technical support lies at the contract low of 136.01.5 and then at 136.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The March Euro currency futures are higher and hit a three-week high in early U.S. trading. Bulls have the 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 and 18-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 1.2200 and then at 1.2250. Shorter-term support is seen at the overnight low of 1.2123 and then at 1.21000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are higher and hit a 13-month high in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend firmly 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 the overnight high of $60.95 and then at $62.00. Look for sell stops just below technical support at $59.00 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures are up in early U.S. pre-market trading. The bulls have the firm overall near-term technical advantage and are showing just enough resilience at higher price levels to keep the bears at bay. Overall supply and demand fundamentals are bullish for the grains. Right now the path of least resistance for grain prices remains sideways to higher.
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