Monday, March 7–Jim Wyckoff’s Morning Markets Report
Global stocks markets were lower overnight and the U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. Geopolitical tensions remain very high as the Russian invasion of Ukraine is set to enter its second week with no off-ramp seen to the conflict that has also created a humanitarian crisis. The U.S. and Europe are considering banning Russian oil imports, which ratchets up further the anxiety in the marketplace, as well as further stokes inflation that has already become problematic. Said one analyst: “This toxic cocktail poses a huge problem for central banks.”
Nymex crude oil prices are sharply higher, at a 14-year high and trading around $123.00 a barrel. Nymex crude prices overnight spiked to a high of $130.50. The all-time high in nearby Nymex crude oil prices was scored in July of 2008, at $147.27 a barrel. The U.S. dollar index is solidly higher again today and hit a 21-month high. The benchmark U.S. 10-year Treasury note is presently yielding 1.73%. Treasury yields have declined recently on flight-to-quality buying of U.S. debt.
Comex gold futures overnight prices hit a 1.5-year high of $2,007.50 on safe-haven demand amid arguably the biggest geopolitical crisis in 30 years. The all-time high in gold futures was set in August of 2020, at $2,063.00. Palladium and copper futures hit record highs overnight. Crypto currencies are under selling pressure Monday, as traders and investors consider them higher risk assets.
U.S. economic data due for release Monday is light and includes the employment trends index and consumer credit.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly lower in early U.S. trading. Prices are trending lower on the daily bar chart and the bears are in solid technical control. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,301.00 and then at last Friday’s high of 4,366.25. Support for active traders is seen at the overnight low of 4,230.00 and then at 4,204.75. Wyckoff’s Intra-day Market Rating: 3.5
June Nasdaq index futures: Prices are lower in early U.S. trading. Bears are in solid control amid a price downtrend in place. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 13,760.00 and then at 14,000.00. On the downside, shorter-term support is seen at the overnight low of 13,531.00 and then at 13,250.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading after hitting a two-month high overnight. 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 neutral to bullish early today. Shorter-term technical resistance is seen at 160 even and then at the overnight high of 160 12/32. Shorter-term support lies at 158 even and then at 157 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are weaker after hitting a two-month high overnight. 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 neutral to bullish early today. Shorter-term resistance lies at 129.00.0 and then at the overnight high of 129.04.0. Shorter-term technical support lies at 128.08.0 and then at 128.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are lower and hit a nearly two-year low 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0967 and then at 1.1000. Shorter-term support is seen at the overnight low of 1.0845 and then at 1.0800. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are strongly 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 $125.00 and then at $127.50. Look for sell stops just below technical support at the overnight low of $121.33 and then at $120.00. Wyckoff’s Intra-Day Market Rating: 7.5
GRAINS
U.S. grain futures prices were sharply higher in early U.S. pre-market trading, with wheat leading the way and hitting a record high. Grain market bulls are remain very strong, but there are warning signs that, from a time perspective, the markets are close to topping out. Extreme price moves at higher levels many times produce “blow off tops.” The Russia-Ukraine war will keep grain futures prices elevated. Look for continued high daily price volatility in the near term. On tap today is the weekly USDA export inspections report.
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