Monday, March 4–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly higher overnight, with the stock market in China hitting a nine-month high. U.S. stock indexes are also pointed toward firmer openings and at multi-month highs when the New York day session begins.
Traders and investors worldwide continue to exhibit risk-on attitudes early this week. The Wall Street Journal reported Sunday the U.S. and China are close to finalizing a trade agreement. The story said China would lower its tariffs on U.S. imported goods, with the U.S. doing the same on most or all of the trade sanctions it levied against China last year. The report said U.S. President Trump and Chinese President Xi Jinping will meet in Florida later this month. A trade deal would end months of trader and investor uncertainty regarding the world’s two largest economies penalizing each other.
Attention of the marketplace later this week will be on the European Central Bank’s regular monetary policy meeting on Thursday. The ECB is expected to loosen its purse strings on money in order to stimulate an anemic Euro zone economy.
The U.S. jobs report from the Labor Department is due out Friday morning. That’s arguably the most important U.S. economic data point of the month.
In overnight news, the Euro zone January producer price index was released and it came in up 0.4% from December and up 3.0%, year-on-year. Those numbers were in line with market expectations.
The key outside markets today see the U.S. dollar index slightly firmer. Nymex crude oil prices are up and trading just above $56.00 a barrel.
U.S. economic reports due for release Monday includes the ISM New York report on business, and construction spending.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher and hit a three-month high in early U.S. trading. Prices are in an uptrend on the daily bar chart and the bulls have the firm near-term technical advantage. 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,825.00 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,800.00 and then at last week’s low of 2,780.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index December futures: Prices are higher and hit a four-month high in early U.S. trading. Prices are in an uptrend on the daily bar chart. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,231.00 and then at 7,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,200.00 and then at 7,150.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly firmer in early U.S. trading today, but hit a nine-week low overnight. Bulls have faded badly recently to suggest more downside price pressure in the near term. 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 neutral to bearish early today. Shorter-term technical resistance is seen at Friday’s high of 144 18/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 16/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are lower and hit a five-week low in early U.S. trading. Bulls have faded badly recently, to suggest a market top is in place. 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 neutral to bearish early today. Shorter-term resistance lies at 122.00.0 and then at 122.05.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.15.0 and then at 121.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is modestly up in early U.S. trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, 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 bullish early today. The dollar index finds shorter-term technical resistance at 96.250 and then at 96.500. Shorter-term support is at the overnight low of 95.795 and then at 95.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are firmer in early U.S. trading. Trading has been choppy and sideways recently. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $57.00 and then at last week’s high of $57.88. Look for sell stops just below technical support at $55.50 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were mixed overnight. News of a likely U.S.-China trade agreement being finalized this month did not give the bulls much of a boost. Bulls have been disappointed by the low level of Chinese purchases of U.S. ag products after that country pledged to purchase more U.S. goods.
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