Thursday, March 10–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight, with European shares mostly down and Asian shares mostly up. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Some stock market bears are calling Wednesday’s U.S. rally a “dead-cat bounce.” The U.S. stock indexes remain in near-term price downtrends on the daily charts. Risk aversion remains elevated amid the ongoing Russia-Ukraine war. Talks between the two warring nations have produced no positive results, including those held today.
The U.S. data point of the day Thursday is the consumer price index report for February, which is expected to come in up 0.7% from January and up 7.8%, year-on-year. If realized, those numbers would be hot, at a four-decade high, and would continue to stoke inflation that threatens to derail global economic growth just as most countries are finally getting past the Covid pandemic.
Meantime, in the Euro zone the European Central Bank is meeting today. No major changes in ECB monetary policy are expected but the wording of comments from ECB President Legarde will be parsed by the marketplace.
Reports said a bipartisan group of U.S. senators is considering passing a bill for sanctions on the purchase or sale of Russian ‘blood’ gold. Russia reportedly has a gold stockpile valued at $132 billion. The lawmakers want to limit Russia’s ability to utilize its gold reserves—namely selling gold for cash. Some analysts say such a move is also targeting China and India, as Russian gold is already cut off from London and New York markets. The U.S. lawmakers pointed to Venezuela’s apparent ability to bypass U.S. sanctions and launder money through gold sales.
The key outside markets see Nymex crude oil prices higher and trading around $113.50 a barrel. The U.S. dollar index is firmer today. The benchmark U.S. 10-year Treasury note is presently yielding 1.924%. U.S. Treasury yields are on the rise this week.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the consumer price index, real earnings and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are lower in early U.S. trading. Prices are trending lower on the daily bar chart and the bears are in solid near-term technical control. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,273.25 and then at this week’s high of 4,317.00. Support for active traders is seen at this week’s low of 4,130.25 and then at the February low of 4,094.25. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are lower in early U.S. trading. Bears are in solid control amid a price downtrend in place. Shorter-term moving averages (4- 9-and 18-day) are 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 bearish early today. Shorter-term technical resistance is seen at this week’s high of 13,875.50 and then at 14,000.00. On the downside, shorter-term support is seen at this week’s low of 13,106.75 and then at the February low of 13,031.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are weaker in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above 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 156 3/32 and then at 157 even. Shorter-term support lies at this week’s low of 155 8/32 and then at 155 even. Wyckoff’s Intra-Day Market Rating: 4.5
June U.S. T-Notes: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 126.26.5 and then at 127.00.0. Shorter-term technical support lies at 126.10.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
EURO CURRENCY
The June Euro currency futures are lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1133 and then at 1.1200. Shorter-term support is seen at 1.1050 and then at 1.1000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are higher in early U.S. trading. Bulls have the firm overall near-term technical advantage but are exhausted to suggest a near-term market top is in place. 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 neutral today. Look for buy stops to reside just above technical resistance at $115.00 and then at $116.57. Look for sell stops just below technical support at $110.00 and then at the overnight low of $107.01. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading. Grain market bulls remain in technical control, but there are a few warning signs that, from a time perspective, the markets are close to or have topped out. It’s my bias that wheat futures have put in a major market top, and such makes it likely that corn and soybeans have done the same. Look for continued higher daily price volatility in the near term. On tap today is the weekly USDA export sales report.
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