Tuesday, February 19–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed to lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, following a three-day U.S. holiday weekend. Traders and investors are not as upbeat this week as last, even though there are no major fresh news developments in the markets.
The ongoing U.S.-China trade talks taking place this week in Washington, D.C. will be closely monitored by the world marketplace. Ideas are mixed on a final deal being reached by the U.S.-imposed early-March deadline.
The U.K. Brexit saga continues to play out, with no deal in place as the late-March deadline approaches for that country to leave the European Union.
Slowing Chinese economic growth is also a bit worrisome for the marketplace.
Gold prices hit a 10-month high overnight on technical buying and amid ideas of easier monetary policies being put in place by the world’s major central banks. The Federal Reserve’s FOMC minutes are due out Wednesday afternoon and will be closely scrutinized by traders and investors.
The key outside markets today see the U.S. dollar index near steady and seeing a mild corrective pullback after hitting a two-month high on Friday. Nymex crude oil prices are higher, hit a three-month high and are trading just above $56.00 a barrel. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.
U.S. economic reports due for release Tuesday is light and includes the NAHB housing market index.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading but did hit a 2.5-month high overnight. Prices are in an uptrend on the daily bar chart and the bulls have the near-term technical advantage. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,782.50 and then at 2,780.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last Friday’s low of 2,729.00 and then at last week’s low of 2,700.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index December futures: Prices are weaker but near last week’s 2.5-month high in early U.S. trading. Prices are in an 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 neutral to bearish early today. Shorter-term technical resistance is seen at last week’s high of 7,095.25 and then at 7,169.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,000.00 and then at last Friday’s low of 6,975.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are near steady in early U.S. trading today. Bulls have the firm overall near-term technical advantage but trading has been choppy the past month. 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 early today. Shorter-term technical resistance is seen at 146 29/32 and then at 147 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at 146 even and then at last week’s low of 145 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
March U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls have the firm overall chart advantage but trading has been choppy. 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 neutral early today. Shorter-term resistance lies at 122.09.5 and then at 122.15.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.30.0 and then at last week’s low of 121.21.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The March U.S. dollar index is firmer and near last week’s two-month high in early U.S. trading. Bulls have upside momentum. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 97.230 and then at 97.500. Shorter-term support is at the overnight low of 96.605 and then at last week’s low of 96.440. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are firmer and hit a three-month high in early U.S. trading. The shorter-term moving averages 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $56.33 and then at $57.00. Look for sell stops just below technical support at the overnight low of $55.59 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were narrowly mixed overnight. The recent surge in the U.S. dollar index is holding back buying interest in the grains. Weekly USDA export inspections data is on tap today. Later this week the USDS Ag Outlook Conference is held, and also USDA will release some more backed-up reports. Thus, Thursday and Friday could be busier trading days for the grain futures.
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