Monday, March 28–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The Russia-Ukraine war continues to sap trader and investor confidence, with rising inflation doing the same. The marketplace is now factoring in a more aggressive pace for the Federal Reserve to raise U.S. interest rates, including 50 basis points at the May FOMC meeting, and maybe the same at the meeting after that.
Also worrisome to the marketplace is China placing its major city of Shanghai in a major Covid rolling lockdown. Reports said Tesla has halted production in its factory at Shanghai. Crude oil prices dropped in part on the news.
The key outside markets see Nymex crude oil prices sharply lower and trading around $109.00 a barrel. The U.S. dollar index is higher early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.51%–the highest in almost three years. Parts of the yield curve have now inverted, which is also suggesting weakening U.S. economic growth.
U.S. economic data due for release Monday includes the advance economic indicators report and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up and hit a six-week high in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the February high of 4,578.50 and then at 4,600.00. Support for active traders is seen at the overnight low of 4,514.00 and then at 4,450.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly firmer in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at last week’s high of 14,840.50 and then at 15,000.00. On the downside, shorter-term support is seen at Friday’s low of 14,572.50 and then at 14,300.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading after hitting a contract low overnight. Bears are in solid command. 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 neutral early today. Shorter-term technical resistance is seen at 149 even and then at 150 even. Shorter-term support lies at the overnight contract low of 146 10/32 and then at 146 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading after hitting a contract low overnight. 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 neutral early today. Shorter-term resistance lies at 122.00.0 and then at 122.16.0. Shorter-term technical support lies at the overnight contract low of 120.30.5 and then at 120.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are slightly down 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 last week’s high of 1.1104 and then at 1.1172. Shorter-term support is seen at the overnight low of 1.0977 and then at 1.0936. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are sharply lower in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $110.00 and then at the overnight high of $112.93. Look for sell stops just below technical support at $107.50 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading, pressured in part by sharp losses in crude oil. Corn and soybean market bulls are in firm overall technical control at elevated prices, while wheat futures are neutral. The all-important USDA planting intentions report on Thursday is coming into clearer focus for grain traders. That’s one of the most important USDA reports of the year for 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