Wednesday, February 7–Jim Wyckoff’s morning markets report
Asian and European stock markets were mixed in overnight trading. U.S. stock index futures are set to open narrowly mixed and not far below their record highs when the New York day session begins. It’s a quieter marketplace at mid-week, with no new fundamental developments to significantly influence the markets. Risk appetite in the general marketplace is not robust, but neither is risk aversion keen—evidenced by U.S. stock indexes hovering near their record highs scored just recently. China is getting ready for its Lunar New Year holiday that starts this weekend.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the international trade report, the weekly DOE liquid energy stocks report and consumer credit. Several Federal Reserve officials are also scheduled to give speeches today.
STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the contract and record high of 4,997.75 and then at 5,050.00. Support for active traders is seen at this week’s low of 4,937.75 and then at 4,900.00. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index futures: Prices are slightly 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 bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the contract and record high of 17,793.50 and then at 17,900.00. On the downside, shorter-term support is seen at this week’s low of 17,554.25 and then at 17,400.00. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at this week’s high of 121 31/32 and then at 123 even. Shorter-term support lies at this week’s low of 119 30/32 and then at the January low of 119 even. Wyckoff’s Intra-Day Market Rating: 4.0
March 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 111.11.5 and then at this week’s high of 111.21.5. Shorter-term technical support is seen at this week’s low of 110.22.5 and then at 110.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are firmer in early U.S. trading. Bears have the 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. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bullish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.0804 and then at 1.0850. Shorter-term support is seen at this week’s low of 1.0740 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are firmer in early U.S. trading. 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 the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $75.00 and then at $76.00. Look for sell stops just below technical support at $73.00 and then at this week’s low of $71.41. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were weaker overnight. Traders are awaiting Thursday morning’s monthly USDA supply and demand report. Charts are still bearish for corn, wheat, soybeans, meal and bean oil. All the grain markets are trending down on the daily bar charts. That means the path of least resistance for their prices remains sideways to lower.
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