Tuesday, February 7–Jim Wyckoff’s morning markets report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The focal point of the marketplace today is a speech to an economics club in Washington, D.C. by Fed Chairman Jay Powell. Traders and investors are anxious to see what Powell has to say after last week’s surprisingly strong U.S. jobs report that many believe could force the Fed to remain hawkish on U.S. monetary policy for longer. A Barron’s headline today reads: “Markets may have misread Powell last week.” That story suggests the marketplace focused too much on Powell’s disinflation comments and not enough on Powell’s remarks that more work needs to be done to tame inflation.
The key outside markets see the U.S. dollar index a bit higher on a continued rebound from last week’s nine-month low. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.642%. Meantime, Nymex crude oil futures prices are up and trading around $75.50 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, the international trade report, the IDB/TIPP economic optimism index. President Joe Biden also delivers his State of the Union address Tuesday evening.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls still have the overall near-term technical advantage. Prices are still in a six-week-old uptrend on the daily bar chart. The 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 is above 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 this week’s high of 4,143.00 and then at last Friday’s high of 4,194.00. Support for active traders is seen at 4,100.00 and then at 4,048.50. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are near steady in early U.S. trading. Bulls have the near-term chart advantage as prices are in a four-week-old uptrend on the daily bar chart. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 12,605.00 and then at 12,800.00. On the downside, shorter-term support is seen at 12,400.00 and then at 12,200.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Bulls are fading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 130 2/32 and then at 131 even. Shorter-term support lies at this week’s low of 128 24/32 and then at 128 even. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls are fading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 113.23.0 and then at 114.00.0. Shorter-term technical support lies at this week’s low of 113.10.5 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
EURO CURRENCY
The March Euro currency futures are lower and hit a four-week low in early U.S. trading. Bulls have the overall near-term technical advantage but are fading. An uptrend on the daily bar chart has been negated. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-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 1.0800 and then at this week’s high of 1.0822. Shorter-term support is seen at 1.0050 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are up in early U.S. trading, on short covering. Bears still have the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at $76.00 and then at $77.00. Look for sell stops just below technical support at the overnight low of $74.35 and then at this week’s low of $72.25. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Prices were mixed overnight. Not much new early this week. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the overall chart advantage but there are early technical clues the wheat markets have bottomed out. Traders are awaiting Wednesday’s monthly USDA supply and demand 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