Wednesday, March 10–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed to higher overnight. China’s stock market stabilized at mid-week after seeing strong selling pressure earlier this week. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Trader and investor attitudes are more upbeat at mid-week, following strong gains posted in the U.S. stock market on Tuesday. However, after retreating a bit Tuesday, U.S. Treasury yields are on the rise again Wednesday morning, which is likely to limit buying interest in equities. The closely watched U.S. Treasury 10-year note yield is fetching 1.554% in early U.S. trading.
In overnight news, producer price inflation data from China is running a bit hotter. The producer price index for February was reported up 1.7% compared to a rise of 0.3% in January. However, the consumer price index in China in February remained tame, at down 0.2%. All these figures are based on year-on-year.
The key U.S. data point at mid-week is the consumer price index for February, expected to come in at up 0.4% from January, compared to a 0.3% rise seen in January from December. CPI, year-on-year in February, is seen up 1.7%.
The key “outside markets” today see Nymex crude oil futures prices higher and trading around $64.25 a barrel. Meantime, the U.S. dollar index is firmer early today.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage but trading has been choppy at higher levels. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-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 this week’s high of 3,891.50 and then at 3,924.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 3,816.50 and then at this week’s low of 3,786.50. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are weaker in early U.S. trading. Prices have been trending down for three weeks. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-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 this week’s high of 12,856.50 and then at 13,000.00. On the downside, shorter-term support is seen at 12,600.00 and then at 12,500.00. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 158 8/32 and then at 159 even. Shorter-term support lies at 157 even and then at Tuesday’s low of 156 21/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker 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 resistance lies at the overnight high of 132.15.5 and then at 132.20.0. Shorter-term technical support lies at 132.00.0 and then at the contract low of 131.23.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro 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 for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1957 and then at 1.2000. Shorter-term support is seen at this week’s low of 1.1861 and then at 1.1850. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. 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 $65.00 and then at $66.00. Look for sell stops just below technical support at the overnight low of $63.13 and then at $62.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are solidly lower in early U.S. pre-market trading, on profit taking and weak long liquidation. It could be that markets will now pause and remain choppy and sideways up until the March 31 USDA planting intentions and quarterly grains stocks reports, which are two of the most important grain market reports of the year. Grain market bulls still have the firm overall near-term technical advantage as prices are still mostly trending up—both on a near-term and longer-term 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