Friday, March 4–Jim Wyckoff’s Morning Markets Report
Global stocks markets were lower overnight and the U.S. stock indexes are pointed toward lower openings when the New York day session begins. Tensions are very high to end the trading week, on overnight news that Russian troops in Ukraine took over the largest nuclear power plant in Europe, which was on fire just before the Russians seized the plant. Said one analyst: “Nobody will want to be short risk going into this weekend.”
Bloomberg in a daily email dispatch reports: “Hedge funds are betting on an extended rally in crude which at least one says could send prices to $200 a barrel. In Europe, natural gas prices remain extremely volatile as authorities prepare for severe economic consequences should Russia cut off supplies.”
Gold and silver markets remain supported by safe-haven demand amid arguably the biggest geopolitical crisis in 30 years. A Dow Jones Newswire headline today reads, “Gold ETFs flooded with money as investors seek safety.” Gold has once again proven all of its safe-haven naysayers wrong. When the going gets really tough, the yellow metal still shines the brightest.
Traders are awaiting Friday morning’s February U.S. employment situation report from the Labor Department. The key non-farm payrolls number is seen coming in at up 440,000 after a gain of 467,000 in January. This report will likely be less markets-sensitive as Fed Chairman Powell this week signaled the Fed will do a 0.25% interest rate increase at its FOMC meeting this month.
The key outside markets today see Nymex crude oil prices higher and trading around $110.00 a barrel after hitting a 13.5-year high of $116.57 on Thursday. The U.S. dollar index is higher again today and hit a 21-month high. The benchmark U.S. 10-year Treasury note is presently yielding 1.778%.
There is no other U.S. economic data due for release Friday.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are trending lower on the daily bar chart and the bears are in firm technical control. 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 neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 4,366.25 and then at this week’s high of 4,410.50. Support for active traders is seen at this week’s low of 4,252.00 and then at 4,219.50. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Bears are in firm control amid a price downtrend in place. 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 14,085.00 and then at this week’s high of 14,389.00. On the downside, shorter-term support is seen at this week’s low of 13,708.00 and then at 13,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are solidly up in early U.S. trading. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 159 22/32 and then at 160 even. Shorter-term support lies at the overnight low of 156 20/32 and then at this week’s low of 154 31/32. Wyckoff’s Intra-Day Market Rating: 6.5
June U.S. T-Notes: Prices are solidly higher in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at the overnight high of 128.27.5 and then at this week’s high of 128.31.5. Shorter-term technical support lies at the overnight low of 127.12.5 and then at 127.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
EURO CURRENCY
The June Euro currency futures are solidly lower and hit a nearly two-year low in early U.S. trading. Bears have the solid 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 bearish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1105 and then at Thursday’s high of 1.1160. Shorter-term support is seen at 1.1000 and then at 1.0950. Wyckoff’s Intra Day Market Rating: 3.5
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading. Bulls have the strong overall near-term technical advantage. 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 bullish today. Look for buy stops to reside just above technical resistance at the overnight high of $112.84 and then at $114.00. Look for sell stops just below technical support at the overnight low of $107.27 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were mostly higher in early U.S. pre-market trading, with wheat leading the way and hitting a 14-year high. Grain market bulls are still very strong, but there are warning signs that, from a time perspective, the markets are close to topping out. Extreme price moves at higher levels many times produce “blow off tops.” The Russia-Ukraine war will keep grain futures prices elevated. Look for continued high daily price volatility in the near term.
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