Thursday, March 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The global equity markets are seeing pressure in part due to a slightly hawkish FOMC meeting of the Federal Reserve that concluded Wednesday afternoon with a quarter-point U.S. rate hike, which was fully expected. The technology sectors remain under pressure this week amid the FaceBook data scandal.
The Bank of England holds its monetary policy meeting on Thursday.
In overnight news, the Euro zone’s composite purchasing managers index (PMI) came in at 55.3 in March. That was below market expectations for a reading of 56.7. A reading above 50.0 suggests growth.
The key “outside markets” on Thursday morning see the U.S. dollar index lower. Trading in the USDX has been choppy but the bears have gained some momentum late this week. Meantime, Nymex crude oil prices are weaker on profit taking from this week’s strong gains that saw prices hit a seven-week high on Wednesday.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the monthly house price index, the U.S. flash services and manufacturing PMIs, leading economic indicators, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are lower and hit a two-week low 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 below the 9-day and 18-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 the overnight high of 2,726.25 and then at 2,744.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,675.00 and then at the March low of 2,651.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index December futures: Prices are lower and hit a two-week low in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 6,850.00 and then at 6,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,796.50 and then at 6,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are solidly higher in early U.S. trading, on short covering from early-week pressure. 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 145 even and then at the March high of 145 11/32. Buy stops likely reside just above those levels. Shorter-term support lies at 144 even and then at the overnight low of 143 22/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 120.13.5 and then at 120.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.03.0 and then at 120.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower and hit a two-week low in early U.S. trading today, on follow-through pressure from Wednesday’s losses. The shorter-term moving averages for the dollar index are neutral as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 89.500 and then at this week’s high of 90.025. Shorter-term support is seen at the overnight low of 88.990 and then at 89.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are lower on profit taking after hitting a seven-week high overnight. Bulls have gained momentum this week, to suggest a push to a new multi-year high soon. Look for buy stops to reside just above technical resistance at the overnight high of $65.74 and then at the January high of $66.02. Look for sell stops just below technical support at $64.50 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were firmer overnight, on short covering from recent losses. Grain market bulls have faded recently to suggest near-term market tops are in place. Look for sideways at best price action for the next several weeks, until spring U.S. planting gets underway.