Monday, March 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stocks were mostly higher overnight. There were no major geopolitical developments during the weekend to move the markets, and trading is quieter to start the week. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
Trader and investor focus is turning to this week’s FOMC meeting of the Federal Reserve, which begins Tuesday and ends Wednesday afternoon with a statement. The FOMC is not expected to change its monetary policy at this meeting. The Fed has become more dovish the past few months.
The Brexit matter continues to play out but it’s on the back burner of the world marketplace. The U.K. has no “soft Brexit” deal in place ahead of the March 29 “hard exit” (no deal) for the U.K. to leave the European Union. Look for Prime Minister Theresa May to soon propose another plan for a soft Brexit to the Parliament.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are modestly lower and trading just above $58.00 a barrel. Oil prices hit a four-month high last Friday.
U.S. economic reports due for release Monday are light and include the NAHB housing market index.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading, and near last week’s five-month high. Bulls have momentum amid a price uptrend on the daily chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 2,836.50 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 2,812.50 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are near steady in early U.S. trading and not far below last week’s five-month high. Bulls have technical momentum to suggest more gains in the near term. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-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 last week’s high of 7,361.00 and then at 7,380.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,328.00 and then at 7,300.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading today. Bulls still have the firm overall near-term technical advantage. 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 bullish early today. Shorter-term technical resistance is seen at the recent highs of 146 17/32 and then at 147 even. Buy stops likely reside just above those levels. Shorter-term support lies at 146 even and then at 145 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are slightly higher in early U.S. trading. Prices Friday hit a nine-week high. 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 bullish early today. Shorter-term resistance lies at last week’s high of 123.03.5 and then at 123.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.28.5 and then at 122.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is weaker in early U.S. trading. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Friday’s high of 96.250 and then at 96.460. Shorter-term support is at last week’s low of 95.810 and then at 95.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly lower in early U.S. trading, on a mild corrective pullback after hitting a four-month high last Friday. 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 last week’s high of $58.95 and then at $60.00. Look for sell stops just below technical support at $58.00 and then at $57.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were weaker overnight. Grain market bears have the overall near-term technical advantage amid overall worldwide slack demand for U.S. ag products.
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