Thursday, February 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. 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 the hottest reading since 1982, if the CPI number meets market expectations.
In overnight news, the European Union is expecting Euro zone inflation to be up 3.5% in 2022 and up 1.7% in 2023. Given recent inflation data it appears EU economic officials are well behind the curve on recognizing the present pace of inflation.
The key outside markets today see crude oil prices higher and trading around $90.50 a barrel. The U.S. dollar index is slightly up early today. The U.S. Treasury 10-year note yield is presently fetching 1.948%.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls are having a good week, so far. 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 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 Wednesday’s low of 4,517.25 and then at this week’s low of 4,456.25. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are slightly down in early U.S. trading. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 15,062.00 and then at the February high of 15,260.00. On the downside, shorter-term support is seen at Wednesday’s low of 14,741.00 and then at this week’s low 14,467.50. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker in early U.S. trading. Bears 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 bearish 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 the contract low of 152 27/32 and then at 152 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are weaker 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 this week’s high of 127.01.0 and then at 127.08.0. Shorter-term technical support lies at the 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: 4.5
EURO CURRENCY
The March Euro currency futures are near steady 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: 5.0
NYMEX CRUDE OIL
March Nymex crude oil prices are higher 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 neutral early today. Look for buy stops to reside just above technical resistance at $91.68 and then at the February high of $93.17. Look for sell stops just below technical support at this week’s low of $88.41 and then at $87.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are mixed to firmer in early U.S. pre-market trading. Soybean and corn market bulls have the solid overall near-term technical advantage. Wheat bulls have gained the slight near-term chart advantage. Focus today is on USDA’s weekly export inspections report. Bloomberg recently interviewed a Goldman Sachs analyst, Jeff Currie, who pointed out major raw commodity futures markets are presently seeing the most “backwardation” since 1997—19 out of 28 markets. Backwardation means nearby futures trading at a premium to the deferred contracts. Usually, deferred futures are higher-priced, due to a “carry” premium. Backwardation suggests strong near-term demand for the commodity. “We’re out of everything, I don’t care if it’s oil, gas, coal, copper, aluminum, you name it we’re out of it,” said Currie. Futures curves are pricing in shortages, the likes of which not seen in 30 years, he added. Crude oil prices are leading the raw commodity price surge. Thus, crude will be a very important market for grain traders to monitor in the coming months.
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