Tuesday, February 21–Jim Wyckoff’s morning markets report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk aversion is elevated to start the U.S. trading week, following President Biden’s surprise visit to the Ukraine and his promise to provide $500 million more in aid to the war-torn nation. This comes at the same time U.S.-China relations continue to deteriorate.
In overnight news, the Euro zone got some upbeat economic news as its February composite purchasing managers index came in at 52.3, which was well above the consensus forecast of 50.5 and compares to the January reading of 50.3. A number above 50.0 suggests growth in the sector.
The key outside markets this morning see the U.S. dollar index modestly higher. Nymex crude oil futures prices are higher and trading around $77.25 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.877%.
U.S. economic data due for release Tuesday includes the U.S. flash and services purchasing managers’ indexes and existing home sales.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading and hit a three-week low overnight. Bulls still have the overall near-term technical advantage but are fading. A seven-week-old uptrend on the daily bar chart has been at least temporarily negated. 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 even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at Friday’s high of 4,096.00 and then at 4,150.00. Support for active traders is seen at the overnight low of 4,047.75 and then at 4,000.00. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower and hit a three-week low in early U.S. trading. Bulls still have the near-term chart advantage but a four-week-old uptrend on the daily bar chart has been negated. 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 bearish early today. Shorter-term technical resistance is seen at Friday’s high of 12,466.25 and then at 12,650.00. On the downside, shorter-term support is seen at the overnight low of 12,228.00 and then at 12,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
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 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 technical resistance is seen at Friday’s high of 126 even and then at 126 20/32. Shorter-term support lies at last week’s low of 124 14/32 and then at 124 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 bearish early today. The 4-day moving average is even with 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 the overnight high of 112.00.5 and then at 112.11.5. Shorter-term technical support last week’s low of 111.08.5 and then at 111.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are lower in early U.S. trading. Prices are in a fledgling downtrend on the daily bar chart. 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.0718 and then at 1.0800. Shorter-term support is seen at last week’s low of 1.0626 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
April Nymex crude oil prices are firmer in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages are neutral early today as the 4-day is below 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 Friday’s high of $78.50 and then at $80.00. Look for sell stops just below technical support at last week’s low of $75.32 and then at $74.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures prices were higher overnight. Grain traders are uneasy about the Russia-Ukraine grain-shipping deal being extended and that’s bullish for grain prices. On tap today is the weekly USDA export inspections report. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the slight overall chart advantage but there are technical clues the wheat markets have bottomed out.
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