Tuesday, March 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly down overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, after strong gains posted Monday. Government bond yields generally pulled back a bit Monday, which assuaged stock market traders for the moment. However, Asian markets were rattled overnight when a top banking official in China said the U.S. and other stock markets were in bubbles that are bound to eventually correct. The U.S. Treasury 10-year note is presently trading around 1.445% for its yield. Many veteran market watchers believe U.S. Treasury yields will continue to climb in the coming months.
In other overnight news, the Euro zone consumer price index for February came in at up 0.9% compared to a 0.9% gain in January. Once again, inflation data coming from a major global economy is nowhere near suggesting problematic price inflation down the road. However, inflation data later this year will probably be more indicative, if any major economies are indeed starting to run too hot.
The key “outside markets” today see Nymex crude oil futures prices near steady and trading around $60.65 a barrel. There is an OPEC meeting on Thursday that the marketplace will closely monitor. The U.S. dollar index is a bit higher early today.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the ISM New York report on business, the IDB/TIPP economic optimism index, and domestic auto industry sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices a bit weaker in early U.S. trading after Monday’s solid gains. Bulls still have the firm overall near-term technical advantage. 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 Monday’s high of 3,901.75 and then at last week’s high of 3,924.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,856.50 and then at 3,825.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are weaker in early U.S. trading after good gains seen Monday. Bulls have the overall near-term technical advantage. 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 the overnight high of 13,316.75 and then at 13,400.00. On the downside, shorter-term support is seen at the overnight low of 13,152.50 and then at 13,000.00. 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 early today. Shorter-term technical resistance is seen at the overnight high of 160 1/32 and then at this week’s high of 160 26/32. Shorter-term support lies at 158 16/32 and then at 158 even. 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 early today. Shorter-term resistance lies at the overnight high of 133.17.0 and then at 133.24.0. Shorter-term technical support lies at this week’s low of 133.00.0 and then at 132.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are lower and hit a four-week low in early U.S. trading. Bulls have lost their overall near-term technical advantage as a price uptrend on the daily chart has been negated. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below with the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.2077 and then at 1.2100. Shorter-term support is seen at the overnight low of 1.2019 and then at 1.2000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
April Nymex crude oil prices are near steady 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 $61.00 and then at $62.00. Look for sell stops just below technical support at the overnight low of $59.45 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures are mixed to lower in early U.S. pre-market trading. Not much new. Markets may be quieter up until the late-March USDA planting intentions report, which is one 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 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