Friday, February 17–Jim Wyckoff’s morning markets report
Global stock markets were lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk aversion is keen to end the trading week. Said market analyst Craig Erlam of OANDA: “Equity markets are ending the week in the red after finally falling victim to the persistent disappointment of U.S. economic data on Thursday. It’s taken a lot but it would appear investors’ eternal optimism is being shaken, with the latest PPI figures finally driving the message home that bringing the U.S. economy in for a soft landing will be extraordinarily challenging and there’ll likely be plenty of turbulence along the way. In reality, the message should have sunk in much sooner but investors were seemingly so convinced that these were just blips in the data that they failed to see how quickly they were stacking up.” Erlam’s comments fall in line with widely followed Morgan Stanley analyst Mike Wilson, who has been right on calling the stock market trajectory the past year or so. Read a Barron’s headline today: “Markets are finally catching up with reality; time to price in rate rises.”
The key outside markets see the U.S. dollar index solidly higher and hitting a five-week high overnight. Nymex crude oil futures prices are solidly lower and trading around $76.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.908% and is on the rise late this week.
U.S. economic data due for release Friday includes import and export prices and leading economic indicators.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading and headed for a technically bearish weekly low close. Bulls still have the overall near-term technical advantage but are fading. A seven-week-old uptrend on the daily bar chart has stalled out. 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 4,100.00 and then at 4,150.00. Support for active traders is seen at 4,050.00 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading. Bulls still have the near-term chart advantage but a four-week-old uptrend on the daily bar chart has stalled out. 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 12,500.00 and then at this week’s high of 12,792.75. On the downside, shorter-term support is seen at last week’s low of 12,243.25 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are solidly lower in early U.S. trading and hit a six-week low overnight. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 125 11/32 and then at 126 even. Shorter-term support lies at the overnight low of 124 14/32 and then at 124 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit a three-month low in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 111.24.0 and then at 112.00.0. Shorter-term technical support the overnight low of 111.08.5 and then at 111.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are lower and hit a five-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading. 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0687 and then at 1.0750. Shorter-term support is seen at 1.0600 and then at 1.0550. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are solidly lower in early U.S. trading. Bears have gained the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $78.25 and then at $80.00. Look for sell stops just below technical support at $75.00 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mixed to mostly firmer overnight. Keener risk aversion in the marketplace late this week will squelch the grain market bulls during today’s day session. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the slight overall chart advantage but there are technical clues the wheat markets have bottomed out.
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