Some Risk Aversion in Marketplace to Start the Trading Week

Monday, March 5–Jim Wyckoff’s Morning Markets Report

OVERNIGHT DEVELOPMENTS

World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.

Gold prices are seeing some safe-haven demand amid the threat of a global trade war after U.S. President Trump announced he was slapping import tariffs on steel and aluminum. Also, the Italian elections on Sunday that produced no clear winner threw fresh uncertainty into the marketplace. Italy is the European Union’s third-largest economy.

Elections in Germany over the weekend showed Chancellor Angela Merkel will likely win a fourth term.

In other overnight news, China said its economic growth rate in 2018 would be 6.5%, with China’s economic officials saying they want to reduce leverage in China’s financial markets.

The key outside markets on Monday morning see the U.S. dollar index slightly higher. Meantime, Nymex crude oil prices are firmer and trading just above $61.00 a barrel.

U.S. economic data due for release Monday includes the U.S. services PMI, the ISM non-manufacturing report on business, and the global services PMI.

–Jim

U.S. STOCK INDEXES

March S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 2,700.00 and then at 2,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,663.75 and then at last week’s low of 2,647.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

March Nasdaq index December futures: Prices are firmer in early U.S. trading. A bearish double-top reversal pattern could be forming on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,833.00 and then at 6,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,742.50 and then at 6,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly higher in early U.S. trading. Bears still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 144 5/32 and then at last week’s high of 144 20/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 143 6/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

June U.S. T-Notes: Prices are higher in early U.S. trading. Bears still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 120.16.0 and then at last week’s high of 120.23.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.03.5 and then at 120.00.0. 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 firmer in early U.S. trading today. Recent gains suggest a near-term market bottom is in place. The shorter-term moving averages for the dollar index are bullish as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.765 and then at 90.140. Shorter-term support is seen at the overnight low of 89.235 and then at 89.000. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have faded recently. Look for buy stops to reside just above technical resistance at $62.00 and then at $62.50. Look for sell stops just below technical support at $61.00 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Grain futures were mostly weaker overnight. Some profit taking is seen after recent strong gains. A serious weather market is playing out in Argentina soybean and corn regions, with U.S. wheat regions also very dry. The grain markets are still in near-term price uptrends to still suggest more sideways-to-higher price action in the coming days, or longer.