Wednesday, February 9–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Attention remains on the release of corporate earnings reports. While the earnings reports have been generally upbeat, traders and investors are still wary about rising inflation and the timing of the Federal Reserve’s tightening of its monetary policy. Rising U.S. Treasury yields this week suggest the marketplace is placing its bets on a more aggressive path of rate hikes from the Fed over the coming months.
The marketplace is still closely watching the Russia buildup of troops and weapons on the Ukrainian border. However, there are growing notions Russia may not invade Ukraine, amid a flurry of diplomacy from European nations.
The U.S. data point of the week will be Thursday morning’s consumer price index report for January, expected to come in at up 7.2%, year-on-year. That would be a hot reading if the CPI number meets market expectations.
The key outside markets today see crude oil prices lower and trading around $88.75 a barrel. The U.S. dollar index is lower early today. The U.S. Treasury 10-year note yield is presently fetching 1.925%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher 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 even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the February high of 4,586.00 and then at 4,600.00. Support for active traders is seen at 4,500.00 and then at this week’s low of 4,456.25. Wyckoff’s Intra-day Market Rating: 6.5
March Nasdaq index futures: Prices are higher in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 15,000.00 and then at the February high of 15,260.00. On the downside, shorter-term support is seen at the overnight low of 14,741.00 and then at this week’s low 14,467.50. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading on short covering after hitting a contract low on Tuesday. Bears still 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 neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 153 30/32 and then at 154 16/32. Shorter-term support lies at 153 even and then at the contract low of 152 27/32. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading and did hit another 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 127.01.0 and then at 127.08.0. Shorter-term technical support lies at the overnight contract low of 126.13.5 and then at 126.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are firmer 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 early today. The Euro currency finds shorter-term technical resistance at the January high of 1.1495 and then at 1.1550. Shorter-term support is seen at this week’s low of 1.1404 and then at 1.1350. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading. Bulls still have the solid overall near-term technical advantage amid a nine-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 bearish early today. Look for buy stops to reside just above technical resistance at $90.00 and then at Tuesday’s high of $91.68. Look for sell stops just below technical support at this week’s low of $88.51 and then at $87.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures are mixed in early U.S. pre-market trading. Soybean and corn market bulls still have the solid overall near-term technical advantage. Wheat bulls and bears are on a level overall near-term technical playing field amid choppy trading. Next up for data is today’s monthly USDA supply and demand report, with keen focus on USDA’s projection of the sizes of the South American corn and soybean crops. Look for a more volatile trading day in the grains today, following the 12:00 noon EDT release of the 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