Wednesday, March 2–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed to firmer overnight and the U.S. stock indexes are pointed toward higher openings when the New York day session begins. The week-old Russian invasion of Ukraine continues and no off ramp for the conflict is in sight. In fact, some military experts are saying the Russia-Ukraine war could last 10 years.
President Biden’s state-of-the-union address Tuesday night saw no surprises, as he discussed the Russia-Ukraine war, problematic price inflation and other domestic matters.
In overnight news, Eurozone inflation hit a record high as the bloc’s February consumer price index rose at a 5.8% rate, year-on-year, following a 5.1% rise in January.
The marketplace awaits Federal Reserve Chairman Jerome Powell’s testimony today to a U.S. House panel. Many market watchers think the geopolitical crisis will alter the timing and degree of the Fed’s expected interest rate increases this year. Powell could shed more light on that notion in his remarks today.
The key outside markets today see Nymex crude oil prices posting strong gains and trading around $108.50 a barrel and hitting an 8.5-year high of $111.50 overnight. An important OPEC meeting is occurring today, which is expected to see the cartel slightly raise its collective crude oil production. The U.S. dollar index is higher again today and hit a 1.5-year high. The benchmark U.S. 10-year Treasury note is presently yielding 1.732%. T-Note yields have been falling the past week, on flight-to-quality buying of U.S. debt.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the Federal Reserve’s beige book and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Prices are still trending lower on the daily bar chart and the bears are in firm technical control. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,390.00 and then at 4,450.00. Support for active traders is seen at this week’s low of 4,252.00 and then at 4,219.50. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. Bears are still in firm control amid a price downtrend in place. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 14,324.25 and then at 14,500.00. On the downside, shorter-term support is seen at this week’s low of 13,708.00 and then at 13,500.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bulls have gained the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 159 5/32 and then at this week’s high of 159 22/32. Shorter-term support lies at 158 even and then at 157 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are solidly lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 128.16.0 and then at the overnight high of 128.29.5. Shorter-term technical support lies at 128.00.0 and then at 127.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
EURO CURRENCY
The June Euro currency futures are lower and hit a 22-month low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.1200 and then at Tuesday’s high of 1.1270. Shorter-term support is seen at the overnight low of 1.1100 and then at 1.1050. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are a sharply higher and hit an 8.5-year high in early U.S. trading. Bulls have the strong overall near-term technical advantage. 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 bullish today. Look for buy stops to reside just above technical resistance at the overnight high of $111.50 and then at $112.50. Look for sell stops just below technical support at the overnight low of $105.35 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 8.0
GRAINS
U.S. grain futures prices were mostly lower in early U.S. pre-market trading, on corrective pullbacks from recent very strong gains that pushed most futures to for-the-move and multi-year highs. There are still worries the global commodity supply chain, including and especially grains, will be seriously disrupted by the Russia-Ukraine war. That will keep grain futures prices elevated. Look for continued high daily price volatility in the near term.
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