Monday, February 25–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly up overnight, with China’s shares sharply higher and posting their biggest gains in almost four years. U.S. stock indexes are also pointed toward higher openings when the New York day session begins. Traders and investors worldwide are cheered by the substantial progress achieved in the U.S.-China trade talks that have been going on the past few weeks. On Sunday, President Trump tweeted that he is delaying the originally imposed early-March deadline for new U.S. tariffs on China’s imports, because of the progress made so far.
In overnight news, Atlanta Federal Reserve president Raphael Bostic said he expects one U.S. interest rate hike in 2019 and one in 2020. He told the Wall Street Journal that the U.S. economy is strong at present, but there is also keener uncertainty about future growth prospects.
Mining giant Barrick gold confirmed today it is making a hostile bid for Newmont Mining, as it proposed an all-share merger that would value the new, single entity at $42 billion. Newmont has so far rejected Barrick’s overtures.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are slightly up and trading around $57.50 a barrel.
U.S. economic reports due for release Monday include the Chicago Fed national activity index, monthly wholesale trade, and the Texas manufacturing outlook survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are up and hit a nearly three-month high in early U.S. trading. Prices are in an uptrend on the daily bar chart and the bulls have the firm 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 bullish early today. Today, shorter-term technical resistance comes in at 2,819.00 and then at 2,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,764.25 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are higher and hit a nearly three-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 bullish early today. Shorter-term technical resistance is seen at 7,169.00 and then at 7,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,100.00 and then at 7,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are lower in early U.S. trading today. Trading has been choppy recently. Bulls still have the overall near-term technical advantage. 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 above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 146 15/32 and Friday’s high of 146 25/32. Buy stops likely reside just above those levels. Shorter-term support lies at last week’s low of 145 17/32 and then at 145 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the overall chart advantage. 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 also even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 122.04.0 and then at 122.09.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 121.25.5 and then at 121.21.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is lower in early U.S. trading. Bulls still have the firm overall near-term technical advantage, but have faded a bit recently. 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 96.400 and then at Friday’s high of 96.650. Shorter-term support is at last week’s low of 96.120 and then at 96.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly firmer and near last week’s three-month high. 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 early today. Look for buy stops to reside just above technical resistance at $58.00 and then at $59.00. Look for sell stops just below technical support at $57.00 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were higher overnight. The U.S.-China trade deal hopes have given the bulls a lift that should support at least sideways price action in the grains in the coming weeks, if not sideways to higher–providing a final trade deal is actually reached.
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