Friday, March 18–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight, with European shares mostly down and Asian shares mostly up. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The Russia-Ukraine war that is into its third week, and its significant impact on sectors of world trade, continues to sap marketplace risk appetite. President Joe Biden and Chinese leader Xi Jinping are set to have a telephone conversation today, with its outcome potentially having pivotal implications on the war. The U.S. hopes to persuade China to distance itself from Russia to avoid U.S. sanctions. However, many think China may come to the aid of Russia in its war with Ukraine. On a more dour note, U.S. government defense officials believe the Russian army’s poor performance in Ukraine has backed Russian dictator Putin into a corner, which makes odds higher that Putin could resort to nuclear weapons amid his weakened conventional military. Heading into the weekend, look for risk aversion in the marketplace to become more elevated as Friday’s trading session progresses.
In a surprising development, Russia apparently has made a payment on U.S. dollar-denominated sovereign bonds, to avoid being in default. That rallied the Russian ruble just a bit. The Russian stock market remains closed.
The key outside markets see Nymex crude oil prices higher and trading around $104.00 a barrel. The U.S. dollar index is firmer today. The benchmark U.S. 10-year Treasury note is presently yielding 2.15%.
U.S. economic data due for release Friday includes existing home sales and leading economic indicators.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. The bears are in overall near-term technical control, but a price downtrend has stalled out to suggest a market bottom is in place. 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 this week’s high of 4,406.75 and then at 4,440.00. Support for active traders is seen at Thursday’s low of 4,320.25 and then at 4,300.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Bears are in firm overall technical control but a price downtrend on the daily chart has stalled out. 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 average is below 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 14,132.50 and then at the March high of 14,389.00. On the downside, shorter-term support is seen at Thursday’s low of 13,819.00 and then at 13,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading, on short covering after hitting a contract low Wednesday. Bears are still in command. 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 neutral to bullish early today. Shorter-term technical resistance is seen at Thursday’s high of 153 9/32 and then at 154 even. Shorter-term support lies at the overnight low of 151 14/32 and then at the contract low of 150 27/32. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher in early U.S. trading, on short covering after hitting a contract low on Wednesday. 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 neutral to bullish early today. Shorter-term resistance lies at Thursday’s high of 124.28.5 and then at 125.00.0. Shorter-term technical support lies at the overnight low of 124.11.5 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are lower in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro 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 Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1172 and then at 1.1200. Shorter-term support is seen at 1.1000 and then at this week’s low of 1.0936. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher 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 today. Look for buy stops to reside just above technical resistance at the overnight high of $108.28 and then at $108.00. Look for sell stops just below technical support at $102.00 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures prices were mixed in early U.S. pre-market trading. Corn and soybean market bulls remain in firm overall technical control and wheat futures are bearish. Geopolitics remains the main driver of the grains and that suggests volatility continuing to be elevated for at least the near term. The all-important USDA planting intentions report on March 31 is coming into view for grain traders.
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