Monday, February 14–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Traders and investors are showing keener risk aversion to start the trading week, as the U.S. says Russia could invade Ukraine any day now. The situation appears to be deteriorating by the day. The uncertainty on the matter is likely to continue to run high, as the U.S. response to a Russian invasion of Ukraine is a wild card—running the gamut of the U.S. slapping more sanctions on Russia, to participating in a full-blown ground war in Europe.
Gold prices rose to a three-month high on safe-haven demand. Meantime, the yield on the U.S. 10-year Treasury note is presently fetching 1.927% after pushing above 2.0% late last week. Inflation worries are also buffeting the marketplace, led by surging energy prices.
The key outside markets today see crude oil prices near steady and trading around $93.00 a barrel after hitting a seven-year high overnight. The U.S. dollar index is higher early today.
There is no major U.S. economic data due for release Monday. However, the pace picks up Tuesday, including the latest U.S. inflation report, the producer price index for January, which is seen coming in up 0.5% from December.
–Jim
U.S. STOCK INDEXES
March S&P 500 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. 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 4,428.00 and then at 4,600.00. Support for active traders is seen at the overnight low of 4,354.00 and then at 4,300.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are down 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 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 the overnight high of 14,298.00 and then at 14,400.00. On the downside, shorter-term support is seen at 14,000.00 and then at the January low of 13,706.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering after hitting a contract low last week. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 153 15/32 and then at 154 even. Shorter-term support lies at the overnight low of 152 5/32 and then at 151 16/32. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low last week. 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 bullish early today. Shorter-term resistance lies at the overnight high of 126.25.5 and then at 127.00.0. Shorter-term technical support lies at the overnight low of 126.08.0 and then at 126.00.0. 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. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1376 and then at 1.1400. Shorter-term support is seen at 1.1300 and then at 1.1250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are slightly lower in early U.S. trading after hitting a seven-year high of $94.94 overnight. Bulls have the solid overall near-term technical advantage amid a 10-week-old price uptrend in place on the daily chart. 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 today. Look for buy stops to reside just above technical resistance at $94.94 and then at $96.00. Look for sell stops just below technical support at $91.00 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are mixed to lower in early U.S. pre-market trading. Corn is near steady, soybeans down and wheat up. Grain market bulls have the overall near-term technical advantage. The keener inflation worries are bullish for the grain markets, but higher risk aversion is a negative. On tap today is the weekly USDA export inspections report.
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