Tuesday, March 24–Jim Wyckoff’s Morning Markets Report
Global stock markets were higher in overnight trading. U.S. stock index futures are presently pointed toward sharply higher to limit-up openings when the New York electronic day session begins. It appears the world stock markets took a more bullish stance toward the Federal Reserve’s “atomic bomb” monetary stimulus moves Monday morning than did the U.S. markets. However, the U.S. stock index futures played catch-up overnight with the big to limit-up gains.
In overnight news, the U.K. is now locked down to control the Covid-19 outbreak. U.S. airlines are now considering halting all flights, but many believe that won’t occur. The buzz in Washington, D.C. and around the U.S. on Tuesday is on when the U.S. will reopen for business and if “the cure is worse than the sickness” regarding coronavirus and the U.S. economy grinding to a halt. President Trump appears to be getting very uneasy the longer the economy is shut down—especially in this presidential election year.
The U.S. Congress has yet to agree on a bailout package for U.S. businesses and citizens. Home Depot founder Ken Langone had a simple message for Congress Monday: “Get off your ass” and get something done for the American people. Most Americans agree with him.
In overnight news, manufacturing surveys in Europe and Japan contracted substantially. The Euro zone Markit purchasing managers index (PMI) was 31.4 in March versus 51.6 in February. A reading below 50.0 suggests contraction in the sector.
The important outside markets today see Nymex crude oil prices solidly up and trading around $25.00 a barrel. The U.S. dollar index is sharply lower after hitting a 17-year high on Monday. The 10-year U.S. Treasury note yield is trading around 0.82% Tuesday. Gold prices are sharply up and pushed well above $1,600.00 overnight, and have gained around $150.00 so far this week.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. flash manufacturing PMI, the services PMI, new residential sales and the Richmond Fed business survey. The Group of Seven financial ministers also meet today via a video teleconference.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are locked limit up in early U.S. trading after hitting a contract low on Monday. Bears still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 2,400.00 and then at 2,450.00. Buy stops likely reside just above those levels. Downside support for active traders today is seen at the overnight low of 2,230.50 and then at 2,200.00. Wyckoff’s Intra-day Market Rating: 8.0
June Nasdaq index futures: Prices are locked limit up in early U.S. trading after hitting a contract low Monday. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 7,400.00 and then at 7,500.00. On the downside, short-term support is seen at 7,200.00 and then at 7,100.00. Wyckoff’s Intra-Day Market Rating: 8.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly lower in early U.S. trading, on a normal corrective pullback from strong gains seen Monday. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 179 4/32 and then at 180 even. Shorter-term support lies at the overnight low of 177 11/32 and then at 177 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading, on a corrective pullback. 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 early today. Shorter-term resistance lies at the overnight high of 138.10.0 and then at Monday’s high of 138.18.0. Shorter-term technical support lies at the overnight low of 137.19.0 and then at Monday’s low of 137.06.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is sharply down in early U.S. trading on a corrective pullback after hitting a 17-year high Monday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above 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 102.000 and then at 102.500. Shorter-term support is seen at 101.500 and then at 101.000. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
May Nymex crude oil prices are higher in early U.S. trading. Bears have the firm overall near-term technical advantage amid a price downtrend in place. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $25.16 and then at $26.00. Look for sell stops just below technical support at the overnight low of $23.70 and then at $23.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
US grain futures are weaker in early US pre-market trading, on corrective pullbacks for those markets that have seen good gains recently—soybeans, meal and wheat. Corn continues to languish. Big gains in the U.S. stock market today would likely produce some fresh buying interest in the grain markets.
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