Thursday, February 11–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings and near record highs when the New York day session begins. Declining Covid-19 infection rates in the U.S. amid ramped up vaccinations, as well as a new government pandemic relief package likely coming for Americans soon, have lifted trader and investor risk appetite recently.
The Chinese Lunar New Year holiday began today and markets in mainland China will be closed the next several days.
Fed Chairman Jerome Powell’s speech to the Economic Club of New York Wednesday afternoon saw the central bank chief reiterate the Fed will maintain its highly accommodative monetary policy by keeping U.S. interest rates very low and continuing its bond-buying program (quantitative easing).
Meantime, the European Union Commission said Thursday the Euro zone economy is set to contract by 0.9% in the first quarter of this year, but then rebound in good fashion by the second half of the year. The more highly contagious strain of Covid-19 is expected to continue to constrict businesses and consumer activity in the Euro zone in the first quarter.
The key “outside markets” today see the U.S. dollar index trading slightly higher. Meantime, Nymex crude oil futures prices are weaker and trading around $58.30 a barrel. The benchmark 10-year U.S. Treasury note yield is currently fetching 1.135%.
U.S. economic data due for release Thursday includes weekly jobless claims report, expected to show new claims of 760,000 compared to 769,000 last week.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are modestly higher in early U.S. trading and near the record high scored Wednesday. Bulls have the solid overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at the record high of 3,928.50 and then at 3,950.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at this week’s low of 3,878.20 and then at 3,860.00. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index futures: Prices are higher in early U.S. trading and not far below Wednesday’s record high. Bulls have the solid overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the contract high of 13,769.25 and then at 13,900.00. On the downside, shorter-term support is seen at the overnight low of 13,612.50 and then at this week’s low of 13,516.75. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading on short covering. Bears have the solid overall near-term technical advantage. 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 the overnight high of 168 even and then at 168 16/32. Shorter-term support lies at 167 even and then at 166 21/32. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly up 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 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 the overnight high of 137.02.0 and then at 137.08.0. Shorter-term technical support lies at 136.24.0 and then at 136.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are slightly lower in early U.S. trading. Bulls are having a good week. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day and 18-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 this week’s high of 1.2151 and then at 1.2168. Shorter-term support is seen at 1.2100 and then at 1.2055. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker on routine profit taking after hitting a 13-month high Wednesday. Bulls still have the solid overall near-term technical advantage. 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 neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $58.91 and then at $60.00. Look for sell stops just below technical support at this week’s low of $57.00 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
U.S. grain futures are mixed in early U.S. pre-market trading, following solid losses on Wednesday. Profit taking was the feature Wednesday. The bulls still have the firm overall near-term technical advantage. However, how the markets close out the week on Friday will be critical for near-term price direction. Closing levels Friday that are at or near the weekly lows would be a clue that near-term market tops are in place. Still, overall supply and demand fundamentals are bullish for the grains. The key question for traders is, has all the bullish news been factored into futures prices. Remember that a strong bull market needs to be fed fresh, bullish fundamental news on a regular basis.
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