Friday, February 18–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins, on corrective bounces after strong losses posted Thursday. Bears continue to have the near-term technical advantage in the U.S. stock indexes, which means the path of least resistance for prices is sideways to lower. Trader and investor risk aversion is still on the high side heading into the weekend. The U.S. insists Russia is poised to invade Ukraine and has the intelligence to back up that claim. Russia still insists it has no plans to invade its neighbor, despite massing 150,000 troops on Ukraine’s border. The major unknown to this geopolitical crisis is now the U.S. and NATO will respond to any Russian incursion into Ukraine. Much will likely depend on the degree to which any invasion occurs. Will any invasion be full-blown or will it be measured? Some are predicting the invasion is coming this weekend.
The other element on the front burner of the marketplace is inflation concerns. This week saw more hot inflation readings come from the U.S. and China. The yield on the U.S. 10-year Treasury note is presently fetching 1.975%, which is down from levels over 2.0% seen earlier this week—likely due to “flight-to-quality” buying of U.S. Treasuries amid the geopolitical crisis.
The key outside markets today see crude oil prices solidly lower and trading around $89.50 a barrel. The U.S. dollar index is a bit firmer today.
U.S. economic data due for release Friday includes existing home sales and leading economic indicators.
–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 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,484.50 and then at 4,525.00. Support for active traders is seen at this week’s low of 4,354.00 and then at 4,300.00. Wyckoff’s Intra-day Market Rating: 5.5
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 below the 9-day and 18-day. The 9-day average 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 14,668.50 and then at 14,800.00. On the downside, shorter-term support is seen at this week’s low of 14,031.00 and then at 13,800.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly up in early U.S. trading, on short covering after hitting a contract low on Wednesday. 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 152 17/32 and then at 153 even. Shorter-term support lies at the overnight low of 151 20/32 and then at 150 29/32. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly lower in early U.S. trading. 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 early today. Shorter-term resistance lies at the overnight high of 126.22.0 and then at this week’s high of 126.25.5. Shorter-term technical support lies at the overnight low of 126.07.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The March 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 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 this week’s high of 1.1402 and then at 1.1450. Shorter-term support is seen at 1.1328 and then at this week’s low of 1.1287. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
March Nymex crude oil prices are solidly lower in early U.S. trading. Bulls still have the overall near-term technical advantage but are fading late this week. 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 bearish today. Look for buy stops to reside just above technical resistance at the overnight high of $91.87 and then at $93.36. Look for sell stops just below technical support at the overnight low of $89.03 and then at $88.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures are mixed in early U.S. pre-market trading. Not much new late this week. Grain market bulls still have the overall near-term technical advantage. Inflation worries are overall bullish for the grain markets, but the keener risk aversion this week is mostly bearish.
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