Thursday, February 29–Jim Wyckoff’s morning markets report
The U.S. data point of the week is Thursday morning’s personal income and outlays report for January, which includes the personal consumption expenditures (PCE) inflation indexes. The PCE price index in January is seen up 2.6%, year-on-year, while the core PCE price index is seen up 2.9% in the same period. Those forecasts are just slightly higher than the readings seen in the December report.
Bitcoin prices have soared this week and are presently trading around $63,500. Barron’s reports bitcoin’s rise is due to better risk appetite in the marketplace, the big rally in the technology heavy Nasdaq stock index, and notions the Federal Reserve will lower U.S. interest rates later this year.
Broker SP Angel said this morning in an email dispatch that China has signaled more fiscal pump-priming for its economy. The Chinese politburo has vowed to make the policy environment “transparent and predictable” in reaction to weak business and consumer confidence. Chinese leadership is signaling it intends to double down on more fiscal instruments to support the economy. “President Xi is pushing ‘disruptive innovation’ and technology self-reliance which, we suspect, is best led by a number of tech entrepreneurs than state-led companies, particularly when it comes to semiconductors and AI,” said the broker.
The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are slightly down and trading around $78.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.305%.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago ISM business survey, pending home sales, and the Kansas City Fed manufacturing survey.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading but not far below last week’s contract and record high. Bulls have the solid overall near-term technical advantage. Prices are in a four-month-old uptrend on the daily bar chart. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 5,169.00 and then at the contract high of 5,184.25. Support for active traders is seen at 5,100.00 and then at 5,075.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly down in early U.S. trading. Bulls still have the solid overall near-term technical advantage. 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 is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 18,298.25 and then at the contract high of 18,382.50. On the downside, shorter-term support is seen at 18,000.00 and then at 17,900.00. 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. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 119 even and then at this week’s high of 119 23/32. Shorter-term support lies at this week’s low of 118 6/32 and then at the February low of 117 11/32. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 110.14.0 and then at this week’s high of 110.21.5. Shorter-term technical support is seen at the February low of 109.25.5 and then at 109.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0916 and then at last week’s high of 1.0937. Shorter-term support is seen at this week’s low of 1.0847 and then at last week’s low of 1.0816. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly lower in early U.S. trading. 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 this week’s high of $79.62 and then at $80.00. Look for sell stops just below technical support at $77.00 and then at this week’s low of $75.84. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed overnight. On tap today is the weekly USDA export sales report. Charts are still bearish for corn, wheat, soybeans, meal and bean oil. All the grain markets are trending down on the daily bar charts. However, my bias is that market bottoms in the grains are not far off.
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