European and Asian stock markets were mixed but mostly weaker in quieter dealings overnight. Chinese markets and some other Asian markets are closed this week for the Lunar New Year holiday, which is making for the subdued trading in world markets this week. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The U.S. highlight Tuesday was President Trump’s State of the Union speech in the evening. Many market watchers thought the president might mention specifics on the U.S.-China trade-talks progress, but he did not. The trade talks appear to be making progress, ahead of the early-March deadline for a deal being reached.
In overnight news, Germany, the workhorse of the European Union economy, reported an unexpected drop in manufacturing orders in December, at down 1.6% from November. A slight rise was expected in the report.
The key outside market today see Nymex crude oil prices weaker trading around $53.50 a barrel. The U.S. dollar index is firmer today.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, preliminary productivity and costs, the international trade report, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are slightly lower on a mild corrective pullback after hitting a seven-week high on Tuesday. Prices are in an 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 and 18-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 this week’s high of 2,737.75 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,697.00 and then at 2,675.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index December futures: Prices are slightly down on a mild pullback after hitting a two-month high Tuesday. Prices are in an uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at this week’s high of 7,033.75 and then at 7,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 6,928.25 and then at this week’s low of 6,858.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading today. Trading has turned choppy. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 146 7/32 and then at 146 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 145 20/32 and then at 145 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are firmer in early U.S. trading. Bulls have the overall chart advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 122.03.0 and then at 122.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.26.0 and then at this week’s low of 121.19.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March U.S. dollar index is firmer again in early U.S. trading. Bulls are having a good week. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 96.000 and then at 96.375. Shorter-term support is the overnight low of 95.785 and then at Tuesday’s low of 95.540 . Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading. Prices Monday hit a 2.5-month high. 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 bearish early today. Look for buy stops to reside just above technical resistance at $54.00 and then at $55.00. Look for sell stops just below technical support at $52.50 and then at $52.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were mostly slightly weaker overnight. USDA reports are showing China is buying some U.S. soybeans, which is limiting selling interest in the grains but not offering much support, as the buys were expected. There is a slew of back-up USDA data coming out Friday morning and the grain markets are likely to be quieter up to that point.
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