Thursday, March 17–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight. Asian equity markets rallied for a second day after the Chinese government said it would work to keep its stock and financial markets buoyant. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins, following very strong gains Wednesday. Risk aversion has receded just a bit this week, on trader and investor hopes that Russia and Ukraine may be making some progress in their peace talks. However, Russian shelling and killing of civilians in Ukraine continues, as U.S. President Biden labeled Russian President Putin a war criminal. Don’t be surprised to see risk aversion in the marketplace become much keener in the near term, as it presently appears “hope” on the peace talks is trumping “reality.” The gold market is suggesting such, as the safe-haven metal trades sharply higher Thursday.
Traders are still digesting the Federal Reserve’s FOMC meeting that ended Wednesday afternoon with a statement and press conference from Fed Chairman Powell. The Fed, as expected, raised its Fed funds rate by 0.25%–the first rate hike since 2018. The FOMC signaled it may raise rates six more times this year and a few times next year, in an effort to tamp down problematic inflation. After the FOMC statement and Powell’s press conference, the marketplace deemed the Fed as being a bit more hawkish on fighting inflation than expected.
In overnight news, the Euro zone February consumer price index rose by 5.9%, year-on-year, which is a record high for the bloc.
The key outside markets see Nymex crude oil prices solidly higher and trading around $99.50 a barrel. The U.S. dollar index is lower again today. The benchmark U.S. 10-year Treasury note is presently yielding 2.123%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction, and industrial production and capacity utilization.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are a bit weaker in early U.S. trading after strong gains posted Wednesday. Prices are still trending lower on the daily bar chart and the bears are in overall near-term technical control. However, more price gains this week would negate the downtrend to suggest a market bottom is in place. 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 early today. Today, shorter-term technical resistance comes in at this week’s high of 4,367.50 and then at 4,410.50. Support for active traders is seen at 4,300.00 and then at Wednesday’s low of 4,239.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are a bit lower in early U.S. trading, after strong gains Wednesday. Bears are still in firm overall technical control amid a price downtrend in place. 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 this week’s high of 14,025.00 and then at 14,250.00. On the downside, shorter-term support is seen at 13,750.00 and then at 13,500.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low Wednesday. Bears are still in command, to suggest more downside. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 153 9/32 and then at 154 even. Shorter-term support lies at the overnight contract low of 151 20/32 and then at the contract low of 150 27/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low on Wednesday. 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 bullish early today. Shorter-term resistance lies at the overnight high of 124.28.5 and then at 125.00.0. Shorter-term technical support lies at the overnight low of 124.04.0 and then at the contract low of 123.25.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are higher in early U.S. trading. Bears still 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 bullish early today. The Euro currency finds shorter-term technical resistance at last week’s high of 1.1159 and then at 1.1200. Shorter-term support is seen at 1.1000 and then at this week’s low of 1.0936. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading. Recent price action still strongly suggests a major market top is in place. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral today. Look for buy stops to reside just above technical resistance at $102.50 and then at $105.00. Look for sell stops just below technical support at $95.00 and then at this week’s low of $93.53. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were mostly up in early U.S. pre-market trading. On tap today is the weekly USDA export sales report. Corn and soybean market bulls remain in firm overall technical control, but wheat is bearish. It’s my strong bias that crude oil and wheat futures have put in major market tops, and that makes it likely that corn and soybeans have done the same.
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