Monday, March 25–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European shares were mostly weaker overnight on heightened concerns regarding slowing global economic growth. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
In overnight news, the closely watched German Ifo business sentiment index improved in March, with a reading of 99.6 versus 98.7 in February. However, the manufacturing component of the report was weaker in March than in February.
The marketplace is not paying much attention to the weekend news that U.S. special prosecutor Robert Mueller’s investigation of President Trump apparently did not turn up anything criminal.
The key outside markets today see the U.S. dollar index weaker on a corrective pullback from solid gains late last week. Meantime, Nymex crude oil prices are near steady and trading around $59.00 a barrel.
U.S. economic reports due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly weaker in early U.S. trading, on mild profit taking after hitting a five-month high last week. Bulls have the firm near-term technical advantage amid a price uptrend on the daily chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above 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 2,825.00 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,790.25 and then at 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are lower in early U.S. trading on mild profit taking after hitting a five-month high last week. Bulls have the firm overall near-term technical advantage amid a price uptrend. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 7,390.50 and then at 7,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,290.00 and then at 7,250.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading today, on profit taking after hitting a contract high on Friday. Bulls have the solid overall near-term technical advantage. 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 neutral to bearish early today. Shorter-term technical resistance is seen at 149 even and then at the contract high of 149 4/32. Buy stops likely reside just above those levels. Shorter-term support lies at 148 even and then at 147 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker on profit taking after hitting a contract high Friday. 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 neutral to bearish early today. Shorter-term resistance lies at the contract high of 124.08.5 and then at 124.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.24.0 and then at 123.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 96.290 and then at 96.500. Shorter-term support is at Friday’s low of 95.695 and then at last week’s low of 95.170. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are near steady in early U.S. trading. 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 to bearish early today. Look for buy stops to reside just above technical resistance at $60.00 and then at last week’s high of $60.39. Look for sell stops just below technical support at the overnight low of $58.33 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were mixed overnight. Grain market bears have the overall near-term technical advantage. However, it does look like they have put in market bottoms recently. Flooding and wet fields in the Corn Belt have traders wondering about the acreage mix in the region. Later this week come some of the most important USDA reports of the year—the U.S. planting intentions and quarterly grain stocks reports on Friday.
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