Thursday, March 1–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. As we ended the tumultuous month of February, it appears that higher volatility is here to stay for a while—maybe not extreme volatility, but certainly up from the low levels seen during most of 2017.
While the market place has digested new Fed Chairman Jerome Powell’s testimony to U.S. lawmakers Tuesday, in which he sounded a more hawkish tone on U.S. monetary policy, some are now thinking Powell’s testimony to the U.S. Senate on Thursday morning could find him clarifying his sentiment put forth Tuesday. On Tuesday Powell intimated there could be four small U.S. rate hikes this year, beginning in March.
In overnight news, the Euro zone manufacturing purchasing managers index (PMI) for February came in at 58.6, which was just slightly above market expectations. A reading above 50.0 suggests growth in the sector.
The key outside markets on Thursday morning see the U.S. dollar index trading modestly higher and hitting a six-week high overnight. There are early chart clues the USDX has put in a near-term bottom. Meantime, Nymex crude oil prices are weaker and trading just above $61.00 a barrel. Oil bulls are fading this week, amid growing U.S. oil production the past few months.
U.S. economic data due for release Thursday includes the weekly jobless claims report, personal income and outlays, the U.S. manufacturing PMI, construction spending, domestic auto industry sales, the global manufacturing PMI, and the ISM report on business.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are weaker in early U.S. trading. Prices are in a three-week-old uptrend on the daily bar chart, but now just barely. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,722.50 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,700.00 and then at 2,682.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index December futures: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,898.75 and then at 6,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,825.00 and then at 6,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are higher and hit a two-week high in early U.S. trading, on more short covering in a bear market. Bears still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 144 16/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 9/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 120.14.5 and then at 120.21.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.00.5 and then at Wednesday’s low of 119.21.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is firmer and hit a six-week high in early U.S. trading. Recent gains suggest a near-term market bottom is in place. The shorter-term moving averages for the dollar index are bullish 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 90.500 and then at 91.000. Shorter-term support is seen at 90.000 and then at 89.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are weaker in early U.S. trading. Bulls are fading this week. Look for buy stops to reside just above technical resistance at the overnight high of $61.83 and then at $62.50. Look for sell stops just below technical support at $60.50 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures were mixed overnight. Traders will closely examine this morning’s weekly USDA export sales report. A serious weather market is playing out in Argentina soybean and corn regions, with U.S. wheat regions also very dry. The grain markets are in near-term price uptrends and bulls have momentum, to suggest more sideways-to-higher price action in the coming days, or longer.