Thursday, February 23–Jim Wyckoff’s morning markets report
Global stock markets were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
Traders and investors have mostly digested the Federal Reserve’s FOMC minutes that were released Wednesday afternoon. The marketplace deemed the minutes as leaning slightly more hawkish than expected, as there were a few FOMC members that wanted a 50-basis-point hike in the Fed fund range at the January meeting. That meeting saw a 25-basis-point rise.
In overnight news, the Euro zone January consumer price index was reported up 8.6%, year-on-year, which was right in line with market expectations.
A feature in the marketplace this week has been rising U.S. Treasury yields, with the benchmark U.S. 10-year note yield inching toward the 4.0% level. That suggests the marketplace is coming to grips with a U.S. Federal Reserve monetary policy that will keep interest rates “higher for longer” to successfully tamp down inflation.
The key outside markets this morning see the U.S. dollar index slightly higher. Nymex crude oil futures prices are firmer and trading around $74.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.945%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the second estimate of fourth-quarter GDP, which includes the closely watched PCE price index, the weekly DOE liquid energy stocks report, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are firmer on short covering after hitting a four-week low Wednesday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,089.25 and then at 4,150.00. Support for active traders is seen at this week’s low of 3,983.75 and then at 3,950.00. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index futures: Prices are firmer on short covering after hitting a three-week low Wednesday. Shorter-term moving averages (4- 9-and 18-day) are 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 neutral early today. Shorter-term technical resistance is seen at 12,300.00 and then at this week’s high of 12,417.75. On the downside, shorter-term support is seen at this week’s low of 12,034.00 and then at 11,800.00. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are slightly lower in early U.S. trading. Prices Wednesday hit a three-month low. 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 technical resistance is seen at Wednesday’s high of 124 30/32 and then at this week’s high of 125 30/32. Shorter-term support lies at this week’s low of 123 30/32 and then at 123 even. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are weaker in early U.S. trading. Prices Wednesday hit a three-month low. 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 Wednesday’s high of 111.14.5 and then at 111.24.0. Shorter-term technical support is seen at this week’s low of 110.30.5 and then at 110.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The March Euro currency futures are slightly lower and hit a six-week low in early U.S. trading. Prices are in a fledgling downtrend on the daily bar chart. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at Wednesday’s high of 1.0676 and then at this week’s high of 1.0718. Shorter-term support is seen at the overnight low of 1.0596 and then at 1.0550. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are higher in early U.S. trading. Bears have the overall near-term technical advantage. 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 Wednesday’s high of $76.55 and then at this week’s high of $77.74. Look for sell stops just below technical support at this week’s low of $73.80 and then at $73.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were mixed overnight. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the overall chart advantage as near-term price uptrends have been negated. Weekly USDA export sales data is out Friday morning, delayed one day this week by the U.S. holiday on Monday.
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