Thursday, February 22–Jim Wyckoff’s morning markets report
In overnight news, the Euro zone reported its January consumer price index up 2.8%, year-on-year, which was in line with market expectations. Meantime, the Euro zone composite purchasing managers index (PMI) for February came in at 48.9, which was just above market expectations. A reading below 50.0 suggests contraction in the sector.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the U.S. flash manufacturing and services purchasing managers indexes, existing home sales and the weekly DOE liquid energy stocks report. Several Federal Reserve officials are also slated to speak today.
STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly higher and hit a contract and record high in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices are in a 3.5-month-old uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is even with the 9-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 5,150.00 and then at 5,175.00. Support for active traders is seen at the overnight low of 5,075.00 and then at 5,050.00. Wyckoff’s Intra-day Market Rating: 7.0
June Nasdaq index futures: Prices are solidly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage. 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 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 contract high of 18,357.25 and then at 18,500.00. On the downside, shorter-term support is seen at the overnight low of 17,910.00 and then at 17,800.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 119 even and then at 120 even. Shorter-term support lies at this week’s low of 117 21/32 and then at 117 even. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 110.22.0 and then at 111.00.0. Shorter-term technical support is seen at the February low of 109.31.5 and then at 109.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are firmer in early U.S. trading and hit a three-week high. Bears still have the overall near-term technical advantage. However, a seven-week-old downtrend on the daily bar chart has been negated. The shorter-term moving averages for the Euro are neutral early today, 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 Euro are bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0937 and then at 1.1000. Shorter-term support is seen at this week’s low of 1.0816 and then at the February low of 1.0753. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly weaker in early U.S. trading. 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 bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $78.56 and then at $80.00. Look for sell stops just below technical support at this week’s low of $76.32 and then at $75.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures prices were steady to firmer overnight. Charts are still fully bearish for corn, wheat, soybeans, meal and bean oil. All the grain markets are trending down on the daily bar charts. My bias is that market bottoms in the grains are not far off.
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