Wednesday, January 27–Jim Wyckoff’s Morning Markets Report
Global stock markets were flat to mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. It’s a busy week for U.S. economic data, highlighted by the Federal Reserve’s two-day Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and Fed Chairman Powell’s press conference. Markets could become more active in the afternoon trade, following the FOMC statement’s release at 2:00 p.m. EDT. Fed Chairman Powell does have a history of making unexpected remarks during his press conference that have rattled markets.
Possibly flying just under the radar of the marketplace at present is talk among some traders and brokers that China is experiencing a serious food shortage. China has been making bigger purchases of U.S. grains lately, as part of a previous trade agreement between the two largest economies in the world. Also, there are some reports that Covid-19 is making a resurgence in some locations in China. All of the above could impact China’s economic growth prospects. Of course, the China government’s secretive nature makes anything of this nature hard to confirm, but it bears keeping a closer eye upon.
The key “outside markets” today see the U.S. dollar index higher. Meantime, Nymex crude oil futures prices are near steady and trading around $52.65 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.04%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, the FOMC statement and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading on profit taking after hitting a record high Tuesday. Bulls still have the solid overall near-term technical advantage. A near-term price uptrend is firmly in place on the daily bar chart. The 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 moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 3,840.00 and then at the record high of 3,862.25. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,800.50 and then at 3,788.50. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are weaker on profit taking after hitting a record high Tuesday. 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 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 Tuesday’s record high of 13,599.75 and then at 13,700.00. On the downside, shorter-term support is seen at Tuesday’s low of 13,380.25 and then at 13,250.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading. Bears still have the firm overall near-term technical advantage amid a price downtrend in place on the daily chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 this week’s high of 170 9/32 and then at 171 even. Shorter-term support lies at the overnight low of 169 20/32 and then at 169 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are firmer 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 137.14.5 and then at 137.20.0. Shorter-term technical support lies at the overnight low of 137.09.0 and then at 137.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are lower in early U.S. trading. 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2182 and then at last week’s high of 1.2203. Shorter-term support is seen at this week’s low of 1.2120 and then at 1.2100. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are near steady in early U.S. trading. Bulls still have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $53.25 and then at the January high of $53.94. Look for sell stops just below technical support at $52.00 and then at last week’s low of $51.44. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are higher again in early U.S. pre-market trading, as the bulls this week have done just what they needed to do after last Friday’s big losses. The bulls have regained momentum and power to suggest at least a challenge of the recent highs, if not pushing to new highs. This week’s lows in the grains are very important technical support levels that the bulls must defend.
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