Friday, March 12–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed mixed to weaker openings when the New York day session begins, on some profit taking and routine downside corrections following recent good gains that pushed the Dow and S&P 500 indexes to record highs on Thursday. Generally, trader and investor risk appetite is robust in the marketplace at present. There are no geopolitical flare-ups, major economies are healing rapidly from their pain of the pandemic and the U.S. government is set to roll out a $1.9 trillion spending package for Americans.
Government bond yields are on the rise again Friday after a very brief respite at mid-week, which has given stock market traders pause again. The closely watched U.S. Treasury 10-year note yield is now fetching 1.609% in early U.S. trading Friday, and back near the highest level seen in over a year. Rising bond yields are not yet at the levels that would produce problematic price inflation, but the trajectory of the rising yields is starting to concern some market watchers. Today, the U.S. gets an inflation report in the producer price index for February, expected to be up 0.5% from January and compares to a rise of 1.3% in January from December.
In other news, Bitcoin prices rose to another record high overnight, above $58,000, before pulling back a bit.
The key “outside markets” today see Nymex crude oil futures prices weaker and trading around $65.65 a barrel. Meantime, the U.S. dollar index is solidly higher early today.
U.S. economic data due for release Friday includes the producer price index and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading, on profit taking after hitting a record high Thursday. Bulls have the solid overall near-term technical advantage. 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 below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Thursday’s record high of 3,949.00 and then at 3,975.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at Thursday’s low of 3,883.25 and then at Wednesday’s low of 3,847.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are solidly lower in early U.S. trading on a corrective pullback from this week’s strong gains. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above 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 13,000.00 and then at this week’s high of 13,110.50. On the downside, shorter-term support is seen at 12,695.00 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly lower in early U.S. trading and near the contract low. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 157 even and then at the overnight high of 157 24/32. Shorter-term support lies at the contract low of 155 27/32 and then at 155 16/32. Wyckoff’s Intra-Day Market Rating: 3.0
June U.S. T-Notes: Prices are solidly lower in early U.S. trading and near the recent contract low. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 132.00.0 and then at 132.08.0. Shorter-term technical support lies at the contract low of 131.23.5 and then at 131.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
EURO CURRENCY
The June Euro currency futures are lower in early U.S. trading. Bears have the 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 neutral to bearish early today. The Euro currency finds shorter-term technical resistance at 1.2000 and then at this week’s high of 1.2014. Shorter-term support is seen at the overnight low of 1.1933 and then at 1.1900. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
April Nymex crude oil prices are weaker in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. 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 early today. Look for buy stops to reside just above technical resistance at the overnight high of $66.24 and then at $67.00. Look for sell stops just below technical support at $65.00 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading, amid a risk-off trading day so far Friday. It could be that markets will pause and remain choppy and sideways up until the March 31 USDA planting intentions and quarterly grains stocks reports. Grain market bulls still have the firm overall near-term technical advantage as prices are still mostly trending up—both on a near-term and longer-term basis.
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