Wednesday, February 14–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly higher overnight. U.S. stock indexes are pointing toward higher openings when the New York day session begins.
The big U.S. economic report of the week will be Wednesday’s consumer price index report. CPI for January is forecast to come in at up 0.4% from December and up 1.9% year-on-year. The so-called “core” inflation rate is forecast to come in at up 1.7%, year-on-year. How the U.S. dollar index reacts to the CPI will be key for the marketplace today.
In overnight news, the Euro zone reported its fourth-quarter gross domestic product at up 0.6% from the third quarter and up 2.7%, year-on-year.
The important “outside markets” on Wednesday morning see the U.S. dollar index near steady. The greenback bears have gained some downside momentum this week. Meantime, Nymex crude oil prices are weaker. The big increase in U.S. shale oil production will weigh down oil prices this year and is likely to glut the world oil market.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, retail sales, manufacturing and trade inventories, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are higher in early U.S. trading. Major near-term chart damage has been inflicted recently to suggest the index has put in at least a near-term market top and will have trouble sustaining any new uptrend. 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 2,680.00 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,661.00 and then at 2,650.00. 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. With the recent major near-term chart damage, there are chart clues that at least a near-term market top is in place and that any price uptrend renewing is still doubtful. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 6,625.00 and then at 6,650.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,552.00 and then at 6,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are slightly higher in early U.S. trading, on more short covering after hitting a contract low Monday. 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 145 9/32 and then at 145 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at Tuesday’s low of 144 6/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are near steady 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 121.07.5 and then at 121.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Tuesday’s low of 120.27.0 and then at this week’s low of 120.20.0. 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 near steady in early U.S. trading. Bears have the overall near-term technical advantage and have regained some downside momentum this week. The shorter-term moving averages for the dollar index are bullish 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 bearish early today. The dollar index finds shorter-term technical resistance at 90.000 and then at this week’s high of 90.310. Shorter-term support is seen at the overnight low of 89.260 and then at 89.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading. The bulls have faded badly recently to suggest a near-term market top is in place. Look for buy stops to reside just above technical resistance at $59.00 and then at $60.00. Look for sell stops just below technical support at last week’s low of $58.07 and then at $57.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were weaker overnight, on downside corrections and mild profit taking from recent gains. The grain markets are in near-term price uptrends, to suggest more sideways-to-higher price action in the coming days, or longer.