Tuesday, March 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stocks were mostly higher overnight. Risk appetite in the world marketplace remains elevated, as there are no major geopolitical matters jolting the world markets. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
Trader and investor focus is on the FOMC meeting of the Federal Reserve, which begins Tuesday morning and ends Wednesday afternoon with a statement. The FOMC is not expected to change its monetary policy at this meeting. The Fed has become more dovish the past few months. As usual, the marketplace will glean the FOMC statement and Fed Chairman Jerome Powell’s wording for clues on the future path and timing of monetary policy changes.
The unresolved Brexit matter continues simmer on the back burner of the world marketplace. The latest development saw a Member of Parliament block for voting a plan presented by Prime Minister Theresa May. It’s becoming more likely that the U.K.’s exit from the European Union will be a long, drawn-out affair.
In other overnight news, the closely watched German Zew economic expectations index rose to -3.4 in March from -13.4 in February. The March number beat trade expectations for a reading of -10.0.
Palladium prices soared to a record high above $1,150 a ton overnight, due in part to Russia, the world’s largest producer, banning the export of scrap and tailings of precious metals from May until November.
The key outside markets today see the U.S. dollar index weaker. The greenback bulls have faded recently. Nymex crude oil prices are modestly higher and trading around $59.50 a barrel. Oil prices hit a four-month high overnight.
U.S. economic reports due for release Tuesday include the weekly Johnson Redbook and Goldman Sachs retail sales reports, and manufacturers’ shipments and inventories.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer and hit a five-month high in early U.S. trading. Bulls have momentum amid a price uptrend on the daily 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 bullish early today. Today, shorter-term technical resistance comes in at 2,865.00 and then at 2,875.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,824.00 and then at 2,812.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher and hit a five-month high in early U.S. trading. Bulls have technical momentum to suggest more gains in the near term. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 7,400.00 and then at 7,450.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,356.50 and then at Monday’s low of 7,321.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are slightly up in early U.S. trading today. Bulls have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the recent highs of 146 17/32 and then at 147 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 145 27/32 and then at 145 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are firmer in early U.S. trading. Prices last Friday hit a nine-week high. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at last week’s high of 123.03.5 and then at 123.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.26.5 and then at 122.20.0. 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 lower and hit a three-week low in early U.S. trading. Bulls still have the overall near-term technical advantage but are now fading. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 95.975 and then at 96.270. Shorter-term support is at 95.500 and then at 95.250. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
April Nymex crude oil prices are higher in early U.S. trading and hit another four-month high overnight. 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 bullish early today. Look for buy stops to reside just above technical resistance at $60.00 and then at $61.00. Look for sell stops just below technical support at $59.00 and then at $58.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed overnight. Not much new early this week. Grain market bears have the overall near-term technical advantage amid overall worldwide slack demand for U.S. ag products. Flooding and wet fields in the Corn Belt have traders wondering about the acreage mix in the region.
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