Monday, February 27–Jim Wyckoff’s morning markets report
Global stock markets were mixed overnight, with Asian shares mostly lower and European shares mostly higher. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The stock index bulls are still jittery after last week, which saw the worst performance of the year for the U.S. stock indexes. Worries about the Federal Reserve keeping U.S. interest rates higher for longer have left traders and investors with less risk appetite. The Wall Street Journal today reported, “Fear is creeping back into the stock market. To protect against a potential downturn, traders are scooping up hedges at the fastest clip since the onset of the Covid-19 pandemic.” Traders are betting the CBOE’s daily volatility index (VIX) will rise in the coming weeks. To do that hedging, traders are buying call options on the VIX, said the WSJ.
The key outside markets this morning see the U.S. dollar index weaker. Nymex crude oil futures prices are slightly lower and trading around $76.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.955%.
U.S. economic data due for release Monday includes durable goods orders, pending home sales and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Prices Friday hit a four-week low. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 4,070.75 and then at 4,100.00. Support for active traders is seen at last week’s low of 3,984.75 and then at 3,950.00. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly up in early U.S. trading. Prices last Friday hit a four-week low. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below 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 12,394.75 and then at 12,500.00. On the downside, shorter-term support is seen at last week’s low of 12,058.00 and then at 11,800.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices Friday hit a three-month 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 early today. Shorter-term technical resistance is seen at 125 16/32 and then at 126 even. Shorter-term support lies at last week’s low of 124 23/32 and then at 124 even. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Prices Friday hit a three-month 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 early today. Shorter-term resistance lies at the overnight high of 111.16.0 and then at 111.24.0. Shorter-term technical support is seen at last week’s low of 111.04.5 and then at 111.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are slightly up and hit a seven-week low in early U.S. trading. Prices are in a 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 bullish early today. The Euro currency finds shorter-term technical resistance at Friday’s high of 1.0677 and then at 1.0700. Shorter-term support is seen at the overnight low of 1.0601 and then at 1.0550. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at the overnight high of $76.82 and then at last week’s high of $77.74. Look for sell stops just below technical support at $75.00 and then at last week’s low of $73.80. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures prices were mixed overnight. On tap today is the weekly USDA export inspections report. Soybean market bulls have the solid overall near-term technical advantage. Corn and wheat bears the overall chart advantage and have momentum on their side, to suggest more selling pressure in the near term.
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