Wednesday, February 1–Jim Wyckoff’s morning markets report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The U.S. stock indexes are still in price uptrends on the daily bar charts and the stock index bulls have the overall near-term technical advantage. However, a Barron’s story on recent upbeat U.S. economic data and the U.S. stock market rally early this year has a headline: “Markets are pricing a fairy-tale ending; the dream can’t come true.”
The U.S. data point of the week is the Federal Reserve Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Most believe the Fed will raise the key U.S. interest rate by 0.25%, following the recent 0.5% rate hikes. As always, the Wednesday afternoon press conference by Fed Chairman Jerome Powell will be closely monitored. The European Central Bank and Bank of England hold their monetary policy meetings Thursday.
In overnight news, the Euro zone reported just a bit tamer consumer inflation in January, as its consumer price index came in at up 8.5%, year-on-year, compared to a rise of 9.2% in December.
An OPEC-plus meeting today is expected to see the oil cartel keep its collective crude oil production unchanged.
The key outside markets today see the U.S. dollar index lower and hovering near its recent nine-month low. Nymex crude oil futures prices are near steady and trading around $78.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching around 3.486%.
It’s a very busy day for U.S. economic data released Wednesday, including the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing purchasing managers’ index (PMI), the ISM report on business manufacturing, the global manufacturing PMI, construction spending, domestic auto industry sales, the FOMC meeting concludes, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are modestly lower in early U.S. trading. Prices are still in a six-week-old uptrend on the daily bar chart. 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 January high of 4,109.25 and then at 4,150.00. Support for active traders is seen at this week’s low of 4,007.50 and then at last week’s low of 3,963.25. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices are in a four-week-old uptrend on the daily bar chart. 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 above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the January high of 12,308.00 and then at 12,500.00. On the downside, shorter-term support is seen at this week’s low of 11,871.00 and then at last week’s low of 11,604.50. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are up in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 131 even and then at 131 21/32. Shorter-term support lies at 130 even and then at last week’s low of 129 10/32. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 115.00.0 and then at 115.13.0. Shorter-term technical support lies at the overnight low of 114.17.0 and then at this week’s low of 114.05.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are higher in early U.S. trading. Bulls have the solid 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 neutral to bullish early today. The Euro currency finds shorter-term technical resistance at the January high of 1.0962 and then at 1.1000. Shorter-term support is seen at this week’s low of 1.0830 and then at 1.0800. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are slightly up in early U.S. trading. Bulls and bears are on a level near-term technical playing field amid recent choppy trading. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $80.49 and then at the January high of $82.66. Look for sell stops just below technical support at $78.00 and then at this week’s low of $76.55. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Prices were mixed overnight. Not much new recently. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the overall chart advantage but there are early technical clues the wheat markets have bottomed out. Grain market traders are still focusing on the outside markets for their daily price direction.
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