Friday, March 11–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed but mostly firmer overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Reports just out are saying Russian President Putin has made comments that the talks with Ukraine are seeing positive shifts. That has lifted trader and investor risk appetite, at least for now. However, many market watchers wonder how Putin can back off from his current aggression against Ukraine and still save face with Russians, who have a history of being very unkind to leaders who perform poorly in wars. Meantime, Russia said it will send thousands of fighters from the Middle East to join its forces in Ukraine. Two cities in western Ukraine were hit by airstrikes overnight. President Biden is lobbying Congress to end normal relations with Russia, which would put Russia in with the likes of North Korea and Iran.
The U.S. Senate overnight passed a one-year, $1.5 trillion federal funding bill, ending the risk of a U.S. government shutdown. The legislation included $13.5 billion in humanitarian and security funds for Ukraine.
The key outside markets see Nymex crude oil prices higher and trading around $108.00 a barrel. Crude prices have backed way off from this week’s 14-year highs. That suggests oil prices may have put in at least near-term tops. The U.S. dollar index is a bit weaker today. The benchmark U.S. 10-year Treasury note is presently yielding 1.98%. U.S. Treasury yields are on the rise this week. It’s been said that bond traders are the smartest traders around. This week’s rising U.S. Treasury yields hint that bond market traders sense peak anxiety from a markets perspective, regarding the Russia-Ukraine war, is now past and that attention is turning more toward rising inflation.
U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading. Prices are still trending lower on the daily bar chart and the bears are in firm near-term technical control. 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 the overnight high of 4,326.75 and then at 4,375.00. Support for active traders is seen at the overnight low of 4,222.00 and then at this week’s low of 4,130.25. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. Bears are still in solid control amid a price downtrend in place. 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 14,000.00 and then at 14,250.00. On the downside, shorter-term support is seen at the overnight low of 13,451.50 and then at this week’s low of 13,106.75. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are a bit weaker in early U.S. trading. Bulls have faded badly this week. 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 155 23/32 and then at 156 even. Shorter-term support lies at this week’s low of 154 13/32 and then at 154 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 126.13.5 and then at 126.26.5. Shorter-term technical support lies at 125.20.0 and then at the February low of 125.14.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are firmer in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below 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 this week’s high of 1.1159 and then at 1.1200. Shorter-term support is seen at 1.1000 and then at 1.0950. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the overall near-term technical advantage but are exhausted to suggest at least a near-term market top is in place. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish today. Look for buy stops to reside just above technical resistance at the overnight high of $110.25 and then at Thursday’s high of $114.88. Look for sell stops just below technical support at this week’s low of $103.63 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures prices were mostly lower in early U.S. pre-market trading. Corn and soybean market bulls remain in solid technical control, but wheat has turned bearish. It’s my strong bias that wheat futures have put in a major market top, and that makes it likely that corn and soybeans have done the same. Look for continued higher daily price volatility in the near term. Grain traders, you need to keep an eye on crude oil. Crude has also showed signs of topping out this week. As goes crude, so goes much of the raw commodity sector, including the grains.
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