Wednesday, March 3–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Marketplace attitudes are upbeat at mid-week after President Biden said on Tuesday all Americans wanting a Covid vaccine should be able to get one by the end of May. Also, the U.S. government is getting closer to rolling out its newest pandemic assistance package that totals $1.9 trillion. “We can see light at the end of the tunnel of the pandemic,” said one market analyst.
In overnight news, the Euro zone services purchasing managers index (PMI) in February came in at 45.7 compared to 45.4 in January. A reading below 50.0 suggests contraction in the sector.
The U.S. data point of the day will be the ADP national employment report for February, which is expected to come in at up 225,000 jobs, following a 174,000 gain in January. This report is a precursor to Friday morning’s employment situation report from the U.S. Labor Department—arguably the most important U.S. economic report of the month.
Traders and investors are still keeping one eye on government bond yields, which have been generally rising recently, and which have made stock markets a bit wobbly at times. The U.S. Treasury 10-year note is presently trading around 1.446% for its yield. Many veteran market watchers believe U.S. Treasury yields will continue to climb in the coming months.
The key “outside markets” today see Nymex crude oil futures prices higher and trading around $61.85 a barrel. There is an OPEC meeting on Thursday that the marketplace will closely monitor. It could be that with oil prices above $60 a barrel that the cartel opens up its oil spigots some more, after curbing production in recent months to prop up prices. The U.S. dollar index is a bit firmer early today.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. services purchasing managers index (PMI), the ISM report on business services, the global services PMI, the Federal Reserve’s beige book and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices higher in early U.S. trading. Bulls have the firm overall near-term technical advantage as prices are not far below the recent contract and record high. The shorter-term moving averages (4-, 9- and 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-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 this week’s high of 3,901.75 and then at last week’s high of 3,924.50. Buy stops likely reside just above those levels. Downside support for active traders is seen at Tuesday’s low of 3,855.25 and then at 3,825.00. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 13,181.00 and then at this week’s high of 13,316.75. On the downside, shorter-term support is seen at 13,000.00 and then at this week’s low of 12,945.00. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 159 29/32 and then at this week’s high of 160 26/32. Shorter-term support lies at the overnight low of 158 18/32 and then at 158 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at this week’s high of 133.23.0 and then at 133.28.0. Shorter-term technical support lies at the overnight low of 133.06.5 and then at this week’s low of 133.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are weaker in early U.S. trading. Bulls and bears are on a level near-term technical playing field amid recent choppy trading. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below with the 9-day and 18-day. The 9-day is above 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 1.2139 and then at 1.2175. Shorter-term support is seen at 1.2050 and then at this week’s low of 1.2019. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
April Nymex crude oil prices are higher in early U.S. trading. Bulls have the solid overall near-term technical advantage amid a price uptrend in place on the daily chart. The shorter-term moving averages 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at Tuesday’s high of $61.21 and then at $62.00. Look for sell stops just below technical support at the overnight low of $59.24 and then at $59.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
U.S. grain futures are lower in early U.S. pre-market trading, on profit taking from the shorter-term traders. Not much new. Markets may be quieter up until the late-March USDA planting intentions report, which is one of the most important grain market reports of the year. Grain market bulls still have the firm overall near-term technical advantage as prices are mostly trending up—both on a near-term and longer-term basis.
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