Monday, March 13–Jim Wyckoff’s morning markets report
Global stock markets were mostly lower overnight, while U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Trader and investor anxiety is elevated to start the trading week, following a turbulent weekend in the wake of late last week’s collapse of Silicon Valley Bank, the sixteenth largest bank in the U.S. The federal government said it would back all depositors in the failed bank. Other smaller U.S. banks are reported to be in stress due to depositor withdrawals. Government regulators have also taken over Signature Bank, which serves many crypto currency companies.
To show how much this event has shaken the general marketplace, Goldman Sachs is now predicting the Federal Reserve will not raise U.S. interest rates at its FOMC meeting next week. Said one market analyst in a Wall Street Journal story today: “When the Fed raises rates so quickly, nine times out of 10, it breaks things. We may see more corporate failures; we may see more regional banks go under.” Read a headline on Dow Jones Newswires: “Bank mayhem is now on the Fed’s radar.”
Gold prices have extended late last week’s sharp gains and have hit a four-week high near $1,900 an ounce today. Safe-haven demand is featured in the metal. U.S. Treasury prices are also solidly up (yields down) on flight-to-quality buying. Meantime, Bitcoin prices are sharply up.
Of course, the fear in the marketplace is a contagion effect and crisis of confidence among the investing public and the general public. The next two days will be critical in gauging the stress of the investing and general public.
The key outside markets today see the U.S. dollar index lower after hitting a three-month high last week. Nymex crude oil futures prices are lower and trading around $75.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.549%, after recently poking above the 4.0% level.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly down and near a two-month low in early U.S. trading. 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 bearish early today. Today, shorter-term technical resistance comes in at 3,950.00 and then at 4,000.00. Support for active traders is seen at the last week’s low of 3,881.00 and then at the December low of 3,822.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly up near steady 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,222.75 and then at 12,500.00. On the downside, shorter-term support is seen at last week’s low of 11,925.75 and then at 11,750.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly higher and hit a five-week high on safe-haven demand in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 130 30/32 and then at 132 even. Shorter-term support lies at the overnight low of 128 7/32 and then at 127 even. Wyckoff’s Intra-Day Market Rating: 7.0
June U.S. T-Notes: Prices are sharply higher and hit a five-week high in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 114.29.5 and then at 115.00.0. Shorter-term technical support is seen at 113.16.0 and then at 113.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
EURO CURRENCY
The June Euro currency futures are firmer in early U.S. trading. 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 bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0799 and then at 1.0850. Shorter-term support is seen at 1.0700 and then at Friday’s low of 1.0640. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are lower in early U.S. trading. Bears have the 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 $76.00 and then at $77.00. Look for sell stops just below technical support at $74.00 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were mixed overnight. Risk aversion in the marketplace this week is likely to limit buying interest in grains. Soybean market bulls have the firm overall near-term technical advantage. Corn and wheat bears have the firm overall chart advantage. On tap today is the weekly USDA export inspections 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