Monday, March 8–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight, with Asian indexes mostly lower and European indexes mostly higher. Asian shares were pressured by more overtures by the Chinese government that suggest consumer debt and stock market speculation will be reined in. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Rising government bond yields remain in the spotlight to start the trading week and remain a bearish element for stock markets. The U.S. 10-year Treasury note was trading around 1.61% this morning.
Tensions are rising in the Middle East after a drone attack by Iran-backed Houthi rebels on a major Saudi Arabian oil facility over the weekend. The Saudis said the attack will not impact overall Saudi oil production levels. Still, the matter deserves close monitoring as any further Saudi Arabia-Iran military conflicts could impact oil flowing out of the Persian Gulf.
In other overnight news, China reported its exports rose a whopping 60.6% in the January-February period, while imports were up 22.2%, year-on-year. Both numbers handily beat market expectations and further suggest the world’s second-largest economy has shifted into high gear.
The key “outside markets” today see Nymex crude oil futures prices higher, hitting a 14-month high, and trading around $66.25 a barrel. Meantime, the U.S. dollar index is higher and hit another 3.5-month high overnight.
U.S. economic data due for release Monday includes the employment trends index and monthly wholesale trade.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are 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 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 to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 3,856.00 and then at 3,880.00. Buy stops likely reside just above those levels. Downside support for active traders is seen at the overnight low of 3,786.50 and then at 3,775.00. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Bulls are fading as prices have been trending down for three weeks. Shorter-term moving averages (4- 9-and 18-day) are neutral to 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 to bearish early today. Shorter-term technical resistance is seen at 12,600.00 and then at the overnight high of 12,751.00. On the downside, shorter-term support is seen at the overnight low of 12,363.25 and then at last week’s low of 12,200.00. Wyckoff’s Intra-Day Market Rating: 3.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading and near last Friday’s contract low. 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 Friday’s high of 157 16/32 and then at 158 even. Shorter-term support lies at the contract low of 155 27/32 and then at 155 16/32. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading and near Friday’s contract 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 bearish early today. Shorter-term resistance lies at the overnight high of 132.05.0 and then at Friday’s high of 132.17.0. Shorter-term technical support lies at the contract low of 131.23.0 and then at 131.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
EURO CURRENCY
The June Euro currency futures are lower and hit a nearly four-month low in early U.S. trading. Bears have the overall near-term technical advantage and have momentum amid the recent steep sell off. 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1957 and then at 1.2000. Shorter-term support is seen at the overnight low of 1.1850 and then at 1.1825. Wyckoff’s Intra Day Market Rating: 3.0
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly higher and hit a 14-month high 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 bullish early today. Look for buy stops to reside just above technical resistance at $67.00 and then at the overnight high of $67.98. Look for sell stops just below technical support at the overnight low of $65.76 and then at $65.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures are firmer in early U.S. pre-market trading. The data point of the week for the grain markets is the monthly USDA supply and demand report near midday Tuesday. Markets may remain choppy and sideways 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