Friday, March 24–Jim Wyckoff’s morning markets report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk aversion is again elevated to end the trading week, as focus is now on credit default swaps with Deutsch Bank that are suggesting stress for that bank. The recent series of banking problems in the U.S. and Europe are playing out as some veteran financial market watchers expected: sort of a rolling crisis that shows no signs of letting up. The Federal Reserve reported Thursday afternoon that U.S. banks drew on $165 billion from the Federal Reserve lending facility in the week ending March 22, highlighting lenders’ concerns over available interbank liquidity, Bloomberg reported.
In overnight news, reports said the U.S. military retaliated with air strikes on Iranian-backed militants in Syria after an Iranian drone strike in that region killed a U.S. worker and injured U.S. military personnel.
The key outside markets today see the U.S. dollar index higher on safe-haven demand. Nymex crude oil futures prices are sharply lower and are trading around $67.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.3%.
U.S. economic data due for release Friday includes durable goods orders and the U.S. flash services and manufacturing purchasing managers’ indexes.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,998.35 and then at Thursday’s high of 4,039.50. Support for active traders is seen at this week’s low of 3,897.25 and then at 3,850.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are weaker in early U.S. trading after hitting a 6.5-month high Wednesday. 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 13,082.00 and then at 13,250.00. On the downside, shorter-term support is seen at Wednesday’s low of 12,678.00 and then at this week’s low of 12,525.25. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly higher in early U.S. trading, on safe-haven demand. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 133 29/32 and then at the January high of 134 16/32. Shorter-term support lies at 132 even and then at the overnight low of 131 6/32. Wyckoff’s Intra-Day Market Rating: 7.0
June U.S. T-Notes: Prices are solidly higher and hit a contract high in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at today’s contract high of 117.01.5 and then at 117.10.0. Shorter-term technical support is seen at 116.00.0 and then at the overnight low of 115.21.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
EURO CURRENCY
The June Euro currency futures are solidly lower in early U.S. trading. The shorter-term moving averages for the Euro are still 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0891 and then at this week’s high of 1.0983. Shorter-term support is seen at this week’s low of 1.0690 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
May Nymex crude oil prices are solidly lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neural to bearish early today. Look for buy stops to reside just above technical resistance at $69.00 and then at $70.00. Look for sell stops just below technical support at the overnight low of $66.90 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
Grain futures prices were mixed overnight. Friday sees elevated risk aversion in the general marketplace that will limit speculative buying interest in grains heading into the weekend. Soybean market bears have the firm overall near-term technical advantage, as soybean meal futures have broken down. Corn and wheat bears have the firm overall near-term chart advantage. The path of least resistance for grain futures markets prices at present is sideways to lower.
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