Monday, February 4–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European and Asian stock markets were mixed in quieter dealings overnight. Chinese markets are closed this week for the Lunar New Year holiday, which could make for quieter trading in world markets this week. U.S. stock indexes are pointed toward near steady openings when the New York day session begins.
Traders and investors are in generally upbeat moods early this week, following a strong U.S. jobs report released last Friday, and on ideas the U.S. and China are moving closer to a trade deal as the early-March deadline for an agreement approaches. U.S. and Chinese officials are set to meet again in China in mid-February, after meeting last week in Washington, D.C.
In overnight news, the Euro zone producer price index for December came in at down 0.8% from November and up 3.0%, year-on-year. That’s yet another inflation report from a major world economy that is not at all worrisome.
The outside markets today see the U.S. dollar index trading higher. Meantime, Nymex crude oil prices are slightly up and trading just above $55.00 a barrel.
U.S. economic reports due for release Monday includes the ISN New York report on business, manufacturers’ shipments and inventories, and the employment trends index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are near steady in early U.S. trading, after hitting a seven-week high on Friday. Prices are in an uptrend on the daily bar 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 neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 2,716.00 and then at 2,725.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,675.75 and then at 2,650.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
March Nasdaq index December futures: Prices are near steady after hitting a seven-week high last Thursday. Prices are in an uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at last week’s high of 6,943.00 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,839.25 and then at 6,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower 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. The 9-day is above 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 146 3/32 and then at 146 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 145 20/32 and then at 145 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are slightly down in early U.S. trading. Bulls have the firm overall chart advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 122.00.0 and then at 122.06.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.26.0 and then at 121.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is firmer in early U.S. trading. The shorter-term moving averages for the dollar index 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 dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 95.505 and then at 95.690. Shorter-term support is the overnight low of 95.305 and then at last week’s low of 94.875 . Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are near steady and hit a 2.5-month high in early U.S. trading. 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 bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $55.75 and then at $56.00. Look for sell stops just below technical support at $54.50 and then at $54.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were weaker overnight. Corn and wheat bears have the near-term technical advantage, while the soybean market is in a neutral near-term technical posture. More USDA data released this week, after a five-week hiatus, will drive grain prices.
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