Tuesday, March 1–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed to lower overnight and the U.S. stock indexes are pointed toward lower openings when the New York day session begins. Still front and center for the marketplace is the Russia-Ukraine war and its implications on world commerce. Reports say Russian has stepped up its military campaign against Ukraine Tuesday, including shelling civilian targets. Brent crude oil prices reached $100 a barrel overnight, with Nymex crude oil futures not far behind. Grain futures prices have soared to multi-year highs.
The West’s very heavy sanctions have crippled Russia’s economy. Add that to the unexpectedly strong resistance being put up by the Ukrainian military to its Russian aggressors and Russian President Putin has been put on thin ice. Some pundits are calling him “unhinged” based upon his recent comments and television appearances. If the demoralized Russian public becomes seriously disenchanted with Putin, the marketplace wonders what he will do. Will his generals attempt a coup? Will Putin attack Western countries? In a desperate move to save his hide or to safe face, would Putin resort to using his nuclear missiles? These are questions that will keep markets on edge for likely some time to come.
U.S. President Biden will address the Russian situation Tuesday evening in his annual state of the union address.
The key outside markets today see Nymex crude oil prices posting sharp gains and trading around $99.00 a barrel. The U.S. dollar index is higher again today. The benchmark U.S. 10-year Treasury note is presently yielding 1.843%. U.S. Treasuries are seeing safe-haven buying interest.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales indexes, the U.S. manufacturing purchasing managers index, the ISM report on business manufacturing, the global manufacturing PMI, construction spending, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are 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 even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,390.00 and then at 4,450.00. Support for active traders is seen at Monday’s low of 4,252.00 and then at 4,219.50. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Bears are 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 14,324.25 and then at 14,500.00. On the downside, shorter-term support is seen at Monday’s low of 13,708.00 and then at 13,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are sharply higher and hit a two-month high 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 159 1/32 and then at 160 even. Shorter-term support lies at 158 even and then at 157 even. Wyckoff’s Intra-Day Market Rating: 8.0
June U.S. T-Notes: Prices are sharply higher and hit a six-week high 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 bullish early today. Shorter-term resistance lies at the overnight high of 128.20.0 and then at 129.00.0. Shorter-term technical support lies at 128.10.0 and then at 128.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 8.0
EURO CURRENCY
The June Euro currency futures are lower 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 Monday’s high of 1.1290 and then at 1.1350. Shorter-term support is seen at 1.1200 and then at the February low of 1.1147. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are a sharply higher 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 neutral to bullish today. Look for buy stops to reside just above technical resistance at the February high of $100.54 and then at $101.00. Look for sell stops just below technical support at $97.50 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 8.0
GRAINS
U.S. grain futures are again posting strong gains in early U.S. pre-market trading and hit hit for-the-move and multi-year highs, on worries the global commodity supply chain will be seriously disrupted by the Russia-Ukraine war and the heavy sanctions slapped on Russia by the West. Look for continued high daily price volatility in the near term. The extreme price moves recently are suggestive of the final phase of a major bull market run in the grains.
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