Monday, February 11–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
European and Asian stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The world marketplace continues in a generally upbeat mood, with no serious geopolitical events at present that would create anxiety.
Focus of the marketplace early this week is on U.S.-China high-level trade talks taking place in Beijing. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer will attend the talks, likely to take place with them present later this week. Many traders and investors are upbeat that a deal can be reached by the March 1 deadline.
In overnight news, the U.K. economy grew at a paltry 1.4% in 2018, with the weak showing being mostly due to Brexit worries. This is yet another downbeat economic report coming out of Europe.
The continuing resolution passed by Congress a couple weeks ago expires on Friday, with the U.S. government set for another partial shutdown in the Democrats and President Trump cannot come to agreement on a budget plan. Another shutdown would be bearish for the U.S. stock market.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices slightly are weaker and trading just above $52.00 a barrel.
There are no major U.S. economic reports due for release Monday.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer in early U.S. trading. Prices are in an uptrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 2,737.75 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,700.00 and then at last week’s low of 2,680.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are higher in early U.S. trading. Prices are still in an uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 6,969.50 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,896.25 and then at last week’s low of 6,841.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are weaker 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. 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 147 1/32 and then at 147 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 146 17/32 and then at 146 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are lower in early U.S. trading. Bulls still have the firm overall chart advantage. 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 resistance lies at the overnight high of 122.13.0 and then at last week’s high of 122.15.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.06.0 and then at 122.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly higher and hit a seven-week high in early U.S. trading. Bulls have upside momentum. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 96.665 and then at 97.000. Shorter-term support is at 96.235 and then at 96.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bearish early today. Look for buy stops to reside just above technical resistance at $53.00 and then at $54.00. Look for sell stops just below technical support at last week’s low of $51.80 and then at $51.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were weaker overnight. Traders will closely examine today’s weekly export inspections report. Last Friday’s big batch of backed-up USDA data that was released did not produce much action in the grain markets. Bulls were hoping for an upside spark but did not get it.
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