Monday, February 6–Jim Wyckoff’s morning markets report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on profit taking after recent strong gains that saw index prices hit multi-month highs last week.
A feature in the marketplace early this week is a strengthening U.S. dollar index and rising U.S. Treasury yields. This follows last Friday’s January U.S. employment situation report from the Labor Department that showed a sharp rise in non-farm payrolls of 517,000. The number was expected to be up only 187,000 jobs, following a rise of 223,000 in the December report. The strong jobs report dashed earlier notions the Federal Reserve might back off on raising interest rates sooner rather than later. A Dow Jones Newswires story this morning is headlined: “Fed cuts look like a dream, not a reality.”
The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.612%. Meantime, Nymex crude oil futures prices are slightly up and trading around $75.50 a barrel.
U.S. economic data due for release Monday includes the employment trends index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading, on a corrective pullback and profit taking after prices last Thursday hit a 5.5-month high. Prices are still in a six-week-old 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,143.00 and then at Friday’s high of 4,194.00. Support for active traders is seen at 4,100.00 and then at 4,048.50. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading, on profit taking after hitting a 4.5-month high last Thursday. Prices are still in a four-week-old 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 the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 12,605.00 and then at 12,800.00. On the downside, shorter-term support is seen at 12,400.00 and then at 12,300.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are solidly lower 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. 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 the overnight high of 130 22/32 and then at 131 even. Shorter-term support lies at the overnight low of 129 even and then at 128 even. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are solidly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 114.00.0 and then at the overnight high of 114.11.5. Shorter-term technical support lies at the overnight low of 114.22.5 and then at 114.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are lower and hit a three-week low in early U.S. trading. Bulls have the overall near-term technical advantage but are fading. An uptrend on the daily bar chart has stalled out. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.0800 and then at 1.0850. Shorter-term support is seen at 1.0750 and then at 1.0700. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are slightly up in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $75.00 and then at $76.00. Look for sell stops just below technical support at last week’s low of $73.10 and then at $72.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Prices were mixed to weaker overnight. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the overall chart advantage but there are early technical clues the wheat markets have bottomed out. Traders are awaiting Wednesday’s monthly USDA supply and demand report. 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