Wednesday, February 2–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. stock index bulls are having a very good week and are gaining strength and momentum again. Generally good U.S. corporate earnings reports are boosting trader and investor confidence this week. China’s markets are closed all week for the Lunar New Year holiday.
In overnight news, the Euro zone consumer price index for January came in at up 5.1%, year-on-year, compared to a forecast of up 5.0%.
The U.S. data point of the day is the ADP national employment report for January, which is expected to come in at up 200,000 jobs. This report is the precursor to the more important Labor Department employment situation report that is due out Friday morning. That report is expected to be somewhat downbeat, with its key non-farm payrolls number expected to come in up only 150,000 jobs in January.
The key outside markets today see crude oil prices a bit lower and trading around $88.00 a barrel. Traders will closely monitor an OPEC-plus meeting that began today. The cartel is expected to raise its collective oil production level. The U.S. dollar index is solidly lower today. The U.S. Treasury 10-year note yield is presently fetching 1.797%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer and hit a two-week high in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 4,600.00 and then at 4,650.00. Support for active traders is seen at the overnight low of 4,547.00 and then at Tuesday’s low of 4,474.00. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index futures: Prices are solidly up and hit a two-week high in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 15,300.00 and then at 15,400.00. On the downside, shorter-term support is seen at the overnight low of 15,104.25 and then at 15,000.00. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading. Bears still have the firm overall near-term technical advantage. Trading has been sideways at lower levels for two weeks. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at 156 even and then at this week’s high of 156 10/32. Shorter-term support lies at this week’s low of 154 25/32 and then at 154 15/32. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are slightly higher 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 neutral early today. Shorter-term resistance lies at the overnight high of 128.02.5 and then at this week’s high of 128.11.5. Shorter-term technical support lies at this week’s low of 127.21.5 and then at 127.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are solidly higher in early U.S. trading. Bears have the firm overall near-term technical advantage. 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 bullish early today. The Euro currency finds shorter-term technical resistance at 1.1350 and then at 1.1400. Shorter-term support is seen at the overnight low of 1.1275 and then at Tuesday’s low of 1.1230. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
March Nymex crude oil prices are near steady in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a two-month-old 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 early today. Look for buy stops to reside just above technical resistance at this week’s high of $88.87 and then at $89.00. Look for sell stops just below technical support at this week’s low of $86.55 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
U.S. grain futures are higher again in early U.S. pre-market trading, with soybeans leading the charge and setting new contract highs again. Corn and bean bulls have the solid overall near-term technical advantage. Wheat prices have been choppy but the bulls still hold the slight overall near-term technical advantage. The “inflation trade” is working in favor of all the grain market bulls at present.
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