Friday, March 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stocks were mostly higher overnight, while U.S. stock indexes are also pointed toward higher openings when the New York day session begins.
The raw commodity sector has been given a boost by news that on April 1 China plans to further cut taxes on its businesses and citizens in an effort to stimulate the world’s second-largest economy and the world’s largest raw commodity importer. This news comes after China’s central bank recently eased its monetary policy following a few months of downbeat economic data, due in part to the U.S.-China trade war.
In overnight news, the Euro zone consumer price index in February rose 0.3% from January and was up 1.5%, year-on-year. Those numbers were in line with market expectations and continue a theme of low and non-problematic inflation in the major world economies.
The Brexit saga continues to play out with no “soft Brexit” deal in place, ahead of the March 29 “hard exit” (no deal) for the U.K. to leave the European Union. While this matter has the attention of the world marketplace, it is not impacting most markets in any significant way, save for the British Pound and U.K. equities.
The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices slightly up and trading around $58.70 a barrel. Oil prices did hit a four-month high overnight.
U.S. economic reports due for release Friday include the Empire State manufacturing survey, industrial production and capacity utilization, Treasury international capital data and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Bulls have momentum as the index is near this week’s four-month high. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 2,826.50 and then at 2,831.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 2.788.25 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are slightly higher in early U.S. trading. Bulls have upside technical momentum as prices are near this week’s five-month high. 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 bullish early today. Shorter-term technical resistance is seen at this week’s high of 7,324.25 and then at 7,350.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,269.75 and then at 7,211.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading today. Bulls still have the firm overall near-term technical advantage. 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 the overnight high of 145 26/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 145 3/32 and then at 144 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are slightly lower 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 122.26.0 and then at this week’s high of 122.31.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 122.18.5 and then at this week’s low of 122.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly lower in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.240 and then at 96.460. Shorter-term support is at this week’s low of 95.810 and then at 95.500. Wyckoff’s Intra Day Market Rating: 4.4
NYMEX CRUDE OIL
April Nymex crude oil prices are near steady in early U.S. trading and hit another four-month high overnight. 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 to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $58.95 and then at $60.00. Look for sell stops just below technical support at $58.00 and then at $57.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were narrowly mixed overnight. Grain market bears have the overall near-term technical advantage amid overall worldwide slack demand for U.S. ag products. There is still uncertainty over the U.S.-China trade agreement progress, and that’s moderately bearish for grain traders.
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