Friday, March 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight and U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins.
The big news late this week is Thursday’s midday announcement from the Trump administration that the U.S. will slap a 25% tariff on steel imports and a 10% tariff on aluminum imports. This news has spooked the marketplace on ideas the Trump moves could spark a worldwide trade war. The European Union has already said it will retaliate. Leaders of countries around the world sounded warnings about the Trump move on tariffs and asked the U.S. president to change his mind.
There is now a new dose of uncertainty in the marketplace from the Trump tariff moves. Also, there are reports coming from inside the White House that Trump’s close advisors are squabbling to the point that some are likely to leave their jobs soon. This has prompted increased demand for safe-haven gold today.
In overnight news, the Euro zone producer price index for January came in at up 0.4% from December and up 1.5%, year-on-year. Those numbers came in very close to market expectations.
Bank of Japan governor Kuroda surprised the marketplace Friday by saying the BOJ will exit its current quantitative easing of monetary policy likely sometime in 2019.
The key outside markets on Friday morning see the U.S. dollar index lower on a corrective pullback after hitting a six-week high on Thursday. Meantime, Nymex crude oil prices are near steady and trading just below $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 Friday includes the ISM New York report on business and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are lower in early U.S. trading. A three-week-old uptrend on the daily bar chart has been negated. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,684.75 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,650.00 and then at 2,625.00. 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. Bulls are fading badly late this week. A bearish double-top reversal pattern could be forming on the daily bar chart. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 6,750.00 and then at the overnight high of 6,778.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,675.00 and then at 6,650.00. 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 slightly higher and hit a three-week high in early U.S. trading, on more short covering and some safe-haven demand. Bears still have the 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 and 18-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 the overnight high of 144 20/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 27/32 and then at 143 6/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly higher in early U.S. trading, on short covering and some safe-haven demand. Bears still have the 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 120.23.0 and then at 120.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.12.5 and then at 120.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is lower on a corrective pullback after hitting a six-week high on Thursday. 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 bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.870 and then at 90.140. Shorter-term support is seen at the overnight low of 89.455 and then at 89.000. Wyckoff’s Intra Day Market Rating: 4.0
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 $61.41 and then at Thursday’s high of $61.83. Look for sell stops just below technical support at this week’s low of $60.18 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were mixed overnight. Some profit taking is seen after strong gains scored in the grains recently. 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 to still suggest more sideways-to-higher price action in the coming days, or longer.