Tuesday, March 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trading is more subdued early this week, amid a lack of major news to move markets and ahead of key events later this week that include high-level trade talks between the U.S. and China, and gross domestic product data coming from several countries.
A feature in the marketplace recently has been falling government bond yields in the major industrialized countries. U.S. Treasury yields briefly inverted late last week when the short-term 3-month note yield moved above the 10-year note yield. In Germany, government bond yields are now just into negative territory. Worries about economic growth in the major countries, combined with very low inflation, are prompting the falling bond yields (rising prices).
The key outside markets today see the U.S. dollar index slightly weaker on a corrective pullback from solid gains late last week. Meantime, Nymex crude oil prices are higher and trading around $59.50 a barrel.
U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, new residential construction, the S&P/Case-Shiller home price indexes, the consumer confidence index, the monthly house price index, and the Richmond Fed business survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have the firm near-term technical advantage amid a price uptrend on the daily chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,850.00 and then at the March high of 2,866.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,806.00 and then at Monday’s low of 2,789.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage amid a price uptrend. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 7,400.00 and then at 7,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,352.50 and then at Monday’s low of 7,290.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading today, on profit taking after hitting a contract high on Monday. Bulls still have the solid 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 149 even and then at the overnight high of 149 6/32. Buy stops likely reside just above those levels. Shorter-term support lies at 148 even and then at 147 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower on profit taking after hitting a contract high Monday. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the 124.10.0 and then at the overnight high of 124.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 123.28.0 and then at 123.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 96.290 and then at 96.500. Shorter-term support is at last Friday’s low of 95.695 and then at last week’s low of 95.170. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are higher in early U.S. trading. 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 neutral to bullish early today. Look for buy stops to reside just above technical resistance at $60.00 and then at last week’s high of $60.39. Look for sell stops just below technical support at the overnight low of $59.04 and then at Monday’s low of $58.33. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed to weaker overnight. Grain market bears have the overall near-term technical advantage. However, it does look like they have put in market bottoms recently. Flooding and wet fields in the Corn Belt have traders wondering about the acreage mix in the region. Later this week come some of the most important USDA reports of the year—the U.S. planting intentions and quarterly grain stocks reports on Friday.
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