Wednesday, February 15–Jim Wyckoff’s morning markets report
Global stock markets were mixed overnight, with Asian shares mostly lower and European shares mostly higher. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The marketplace is a bit unsettled at mid-week, following a U.S. consumer price index report on Tuesday that was just slightly above market expectations. The takeaway from Tuesday’s CPI report appears to be that the Federal Reserve has more heavy lifting to do in the coming months to get inflation down to the level the Fed desires, which is around 2% annually. The U.S. producer price index report is Thursday.
The U.S. data point of the day Wednesday is the retail sales report for January, which is expected to come in up 1.9% from December, following a decline of 1.1% in December from November.
The key outside markets see the U.S. dollar index higher. Nymex crude oil futures prices are modestly lower and trading around $78.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.742%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Empire State manufacturing survey, retail sales, industrial production and capacity utilization, the NAHB housing index, manufacturing and trade inventories, Treasury international capital data, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Bulls still have the overall near-term technical advantage. Prices are in a seven-week-old 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 bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,186.50 and then at the February high of 4,208.50. Support for active traders is seen at Tuesday’s low of 4,103.75 and then at last week’s low of 4,060.75. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are weaker in early U.S. trading. Bulls still have the near-term chart advantage as prices are in a four-week-old 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 below the 9-day. The 9-day average is above 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 12,687.00 and then at 12,818.50. On the downside, shorter-term support is seen at Tuesday’s low of 12,390.50 and then at last week’s low of 12,243.25. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading on short covering after hitting a five-week low Tuesday. 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 technical resistance is seen at 128 even and then at this week’s high of 128 26/32. Shorter-term support lies at this week’s low of 126 14/32 and then at 126 even. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are a bit higher in early U.S. trading, on short covering after hitting a six-week low Tuesday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is even with 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 resistance lies at 112.20.0 and then at 112.28.0. Shorter-term technical support lies at this week’s low of 112.03.0 and then at 112.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The March Euro currency futures are weaker in early U.S. trading. Bulls still have the firm 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. 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 this week’s high of 1.0824 and then at 1.0900. Shorter-term support is seen at this week’s low of 1.0674 and then at 1.0600. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
March Nymex crude oil prices are down in early U.S. trading. Bulls and bears are on a level overall near-term technical playing field. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at this week’s high of $80.62 and then at $82.00. Look for sell stops just below technical support at this week’s low of $77.46 and then at $76.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures prices were lower overnight, amid a risk-off trader mentality in the general marketplace at mid-week. The grain market bulls, overall, have gained some upside technical momentum recently. Corn and soybean market bulls have the overall near-term technical advantage. Wheat futures bears have the slight overall chart advantage but there are technical clues the wheat markets have bottomed out.
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