Friday, March 19–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Friday is “quadruple witching” day for the marketplace, in which stock options, stock futures and futures options expire. Such could provide some extra volatility in the U.S. stock market today.
Geopolitics is back closer to the front burner of the marketplace to end the week. This week has seen President Biden refer to Russian President Putin as a “killer” and then on Thursday at a U.S.-China ministerial meeting in Alaska both sides lashed out at each other over various matters. While not roiling the marketplace, this week’s moves by the Biden administration toward Russia and China have put the world on notice that U.S. foreign-policy sailing might not be as smooth with Biden as many had reckoned.
U.S. Treasury bond yields are in the spotlight late this week. The U.S. Treasury 10-year note yield hit 1.75% Thursday—a 14-month high–and is now fetching 1.69% Friday morning. More and more, traders, investors and market watchers are moving to the higher-inflation (and possibly problematic inflation) camp. The bull run in the U.S. stock market has not been derailed, yet, but stock market bulls are a bit wobbly now.
In overnight news, the Bank of Japan kept its monetary policy unchanged at its meeting Friday. The BOJ said it expects its interest rates to remain steady or to even fall a bit.
The key “outside markets” today see Nymex crude oil futures prices higher after getting pounded lower Thursday, trading around $61.00 a barrel this morning. Meantime, the U.S. dollar index is slightly up early today.
There is no major U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the solid 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 early today. Today, shorter-term technical resistance comes in at the contract high of 3,978.50 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 3,898.50 and then at 3,875.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are firmer in early U.S. trading. 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 early today. Shorter-term technical resistance is seen at 13,000.00 and then at 13,150.00. On the downside, shorter-term support is seen at the overnight low of 12,713.50 and then at 12,600.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher on short covering after hitting a contract low on Thursday. 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 neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 155 9/32 and then at 156 even. Shorter-term support lies at the overnight low of 154 6/32 and then at 154 even. 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 Thursday. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 131.21.5 and then at 131.24.0. Shorter-term technical support lies at the overnight low of 131.10.0 and then at the contract low of 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below 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 1.1959 and then at last week’s high of 1.2014. Shorter-term support is seen at this week’s low of 1.1905 and then at the March low of 1.1861. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are higher in early U.S. trading after getting pounded to a five-week low on Thursday. Bulls still have the overall near-term technical advantage but a price uptrend on the daily chart has been negated, to suggest a 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $61.33 and then at $62.00. Look for sell stops just below technical support at the overnight low of $59.11 and then at this week’s low of $58.20. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are firmer in early U.S. pre-market trading. Trading remains choppy as the grain traders await the very important March 31 USDA planting intentions and quarterly grains stocks reports. Grain market bulls still have the firm overall near-term technical advantage as prices are still mostly trending up—both on a near-term and longer-term basis. One important element: grain traders need to keep an eye on crude oil prices. Thursday’s big price decline in crude fired a shot across the bow for raw commodity market bulls. If oil prices take out Thursday’s low, such would be one clue that many of the raw commodity sector markets that had been in rally modes, may have topped out, at least for the near term, including the grains.
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