Tuesday, March 14–Jim Wyckoff’s morning markets report
Global stock markets were mostly lower overnight, while U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Trader and investor anxiety is still elevated Tuesday, following late last week’s collapse of Silicon Valley Bank (SVB), the sixteenth largest bank in the U.S. The reverberations of the bank failure are still present in the marketplace and will likely continue to be for at least the next few days.
Focus today is on the U.S. consumer price index report for February, which is forecast coming in at up 6.0%, year-on-year, compared to a rise of 6.5% in the January CPI report.
Goldman Sachs and many other analysts are forecasting the Federal Reserve now will not raise U.S. interest rates at its FOMC meeting next week. The fear in the marketplace is a contagion effect and crisis of confidence among the public. So far today, there does not appear to be extreme anxiety or panic in the marketplace, following the U.S. government’s pledge to cover the funds for all of SVB’s depositors—but not its investors in its stock.
The U.S. Treasury market has stabilized. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.605%. Another surge in U.S. T-Bond and T-Note prices (falling yields) would suggest a surge in marketplace worry and anxiety. The U.S. 2-year Treasury note on Monday surged to the largest daily price gain (yield decline) since the stock market meltdown in 1987.
The key outside markets today see the U.S. dollar index firmer after a steep two-session downdraft. Nymex crude oil futures prices are solidly lower and trading around $73.00 a barrel. Crude has been hit this week by worries about declining global demand amid the financial turmoil and its lingering implications.
Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales indexes and the NFIB small business index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading after hitting a 2.5-month low Monday. The 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at Monday’s high of 3,971.50 and then at 4,000.00. Support for active traders is seen at Monday’s low of 3,839.25 and then at the December low of 3,822.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly up in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at Monday’s high of 12,222.75 and then at 12,500.00. On the downside, shorter-term support is seen at Monday’s low of 11,806.25 and then at 11,650.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower on a corrective pullback after hitting a five-week high Monday, on safe-haven demand. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neural to bullish early today. Shorter-term technical resistance is seen at the overnight high of 132 4/32 and then at Monday’s high of 132 30/32. Shorter-term support lies at 130 even and then at 129 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are solidly lower on a corrective pullback after hitting a five-week high Monday. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 115.00.0 and then at Monday’s high of 115.13.0. Shorter-term technical support is seen at the overnight low of 113.22.0 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at Monday’s high of 1.0816 and then at 1.0850. Shorter-term support is seen at Monday’s low of 1.0713 and then at last Friday’s low of 1.0640. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $74.90 and then at $76.00. Look for sell stops just below technical support at Monday’s low of $72.30 and then at the December low of $70.86. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mostly lower overnight. Risk aversion in the marketplace this week is likely to continue to limit buying interest in grains. Soybean market bulls have the overall near-term technical advantage. Corn and wheat bears have the firm overall chart advantage.
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