Tuesday, February 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to weaker overnight. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. The U.S. stock index bulls have now regained all of the sharp losses seen in February. Now, the specter of big and bearish double-top reversal patterns exists on the daily bar charts for the U.S. stock indexes, if prices challenge the January highs.
Traders are anxiously awaiting new Federal Reserve Chairman Jerome Powell’s first speech to the U.S. House of Representatives on Capitol Hill at 10:00 a.m. EST on Tuesday. He speaks to the U.S. Senate on Thursday. Traders and investors will parse his every word for clues on the direction and timing of U.S. monetary policy moves.
The key outside markets on Tuesday morning see the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are weaker and trading above $63.00 a barrel. Growing U.S. oil production the past few months is a major factor that is likely to cap oil price advances.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the advance economic indicators report, the S&P/Case-Shiller home price index, the monthly house price index and the consumer confidence index.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are weaker in early U.S. trading, on a mild corrective pullback from recent good gains. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,787.00 and then at 2,800.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,760.00 and then at Monday’s low of 2,742.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index December futures: Prices are weaker in early U.S. trading, on a mild corrective pullback from recent good gains. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 7,009.00 and then at the January high of 7,047.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,950.00 and then at 6,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid 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 143 8/32 and then at Monday’s high of 143 26/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 142 26/32 and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker in early U.S. trading. Bears have the solid 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 resistance lies at the overnight high of 120.09.5 and then at Monday’s high of 120.14.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.00.0 and then at 119.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is near steady in early U.S. trading. Bears have the overall near-term technical advantage. However, recent gains begin to suggest a near-term market bottom is in place. The shorter-term moving averages for the dollar index are neutral as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at Monday’s high of 89.605 and then at last week’s high of 89.780. Shorter-term support is seen at Monday’s low of 89.055 and then at 88.700. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
April Nymex crude oil prices are weaker in early U.S. trading. Look for buy stops to reside just above technical resistance at Monday’s high of $64.24 and then at $65.00. Look for sell stops just below technical support at $63.00 and then at $62.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were higher again overnight. A serious weather market is playing out in Argentina soybean and corn regions.
The grain markets are in near-term price uptrends, to suggest more sideways-to-higher price action in the coming days, or longer.