Monday, March 14–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mostly higher overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. There is just a bit of optimism on de-escalating the Russia-Ukraine war, despite the fact it still raging in Ukraine. The U.S. and China are set to hold their first high-level talks since Russia’s invasion of Ukraine. The White House said National Security Adviser Jake Sullivan will meet in Rome Monday with China’s top diplomat, Communist Party Politburo member Yang Jiechi. U.S. officials say Russia has asked China for military aid for its war with Ukraine. That suggests Russian President Putin has faced more setbacks in the war than he anticipated. U.S. officials say they haven’t seen evidence Beijing has tried to circumvent sanctions on Russia. The thinking is that if China and the U.S. show a united front on opposing the war, Russia may de-escalate. However, others doubt Putin will back off and show weakness. Meantime, Russia and Ukraine are still meeting for talks, although there have been no major break-throughs despite notions some progress has been made.
In other news, China has locked down a major city, Shenzhen, which is a technology hub, due to Covid again spreading. Chinese stocks dropped on the news. That has also helped to put some price pressure on raw commodity markets to start the trading week.
The U.S. data point of the week will be the Federal Reserve’s FOMC meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the Fed will raise its Fed funds rate by 0.25%.
The key outside markets see Nymex crude oil prices lower and trading around $104.00 a barrel. Crude prices have backed way off from last week’s 14-year highs. That suggests oil prices may have put in at least near-term tops. The U.S. dollar index is lower today. The benchmark U.S. 10-year Treasury note is presently yielding 2.08%. U.S. Treasury yields are on the rise. For perspective, the U.K. 10-year gild yield is presently 1.566% and the German 10-year bund is yielding 0.314%.
There is no major U.S. economic data due for release Monday.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. Prices are still trending lower on the daily bar chart and the bears are in firm overall near-term technical control. The 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 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 4,300.00 and then at last week’s high of 4,326.75. Support for active traders is seen at Friday’s low of 4,189.00 and then at last week’s low of 4,130.25. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are firmer in early U.S. trading. Bears are still in solid overall technical control amid a price downtrend in place. 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 last week’s high of 13,875.50 and then at 14,000.00. On the downside, shorter-term support is seen at last week’s low of 13,106.75 and then at the February low of 13,031.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are sharply down and hit a three-week low in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 154 even and then at 155 even. Shorter-term support lies at the overnight low of 153 7/32 and then at 153 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are solidly lower and hit a contract low in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 125.20.0 and then at today’s high of 126.04.0. Shorter-term technical support lies at the overnight contract low of 125.05.0 and then at 125.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0
EURO CURRENCY
The June Euro currency futures are higher in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is even with the 9-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 the overnight high of 1.1026 and then at Friday’s high of 1.1081. Shorter-term support is seen at the overnight low of 1.0936 and then at 1.0900. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are solidly lower in early U.S. trading. Recent price action suggests at least a near-term market top is in place. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish today. Look for buy stops to reside just above technical resistance at $105.00 and then at the overnight high of $109.72. Look for sell stops just below technical support at $100.00 and then at $97.50. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
U.S. grain futures prices were lower in early U.S. pre-market trading. Corn and soybean market bulls remain in technical control, but wheat has turned bearish. It’s my strong bias that wheat futures have put in a major market top, and that makes it likely that corn and soybeans have done the same. Look for continued higher daily price volatility in the near term. Grain traders, you need to keep an eye on crude oil, which is sharply down today. Crude has also shown signs of topping out. On tap today is the weekly USDA export inspections report.
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