Wednesday, March 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The stock, financial and currency markets are somewhat spooked after White House chief economist Gary Kohn announced his resignation amid the increasingly protectionist rhetoric coming from U.S. President Donald Trump.
The resignation of Kohn suggests Trump is pushing forward with his plan to slap tariffs on imported aluminum and steel. Kohn’s departure heightened the speculation that there is keen turmoil presently in the White House west wing.
In overnight news, the European Union warned the U.S. that it will retaliate to any U.S. trade tariffs levied against the EU.
The Euro zone reported its fourth-quarter gross domestic product at up 0.6% from the third quarter and up 2.7%, year-on-year. Those numbers were right in line with market expectations.
The key outside markets on Wednesday morning see the U.S. dollar index lower. Nymex crude oil prices are lower and trading just above $62.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, revised productivity and costs, the international trade in goods and services report, the Federal Reserve’s beige book, consumer installment credit, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 this week’s high of 2,734.50 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,681.25 and then at this week’s low of 2,663.75. 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. 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 the overnight high of 6,866.25 and then at 6,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,798.25 and then at 6,750.00. 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 firmer in early U.S. trading. Bears have the firm 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 144 even and then at this week’s high of 144 5/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 8/32 and then at this week’s low of 142 21/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher in early U.S. trading. Bears have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 120.14.5 and then at this week’s high of 120.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.02.5 and then at this week’s low of 119.26.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower and hit a two-week low in early U.S. trading today. The shorter-term moving averages for the dollar index are neutral as the 4-day is below the 9-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 89.500 and then at this week’s high of 89.765. Shorter-term support is seen at the overnight low of 89.235 and then at 89.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are weaker in early U.S. trading. Bulls are having a good week, so far. Look for buy stops to reside just above technical resistance at this week’s high of $63.28 and then at $63.50. Look for sell stops just below technical support at $62.00 and then at this week’s low of $61.10. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were weaker overnight. Some profit taking is seen after recent strong gains. Bulls still have the near-term technical advantage amid price uptrends. The big news this week will be Thursday’s USDA supply and demand report.