Thursday, February 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are also pointed to narrowly mixed openings when the New York day session begins.
The marketplace has mostly digested Wednesday afternoon’s FOMC minutes that said stronger-than-expected U.S. economic growth in recent weeks is keeping the Federal Reserve on pace to keep gradually raising U.S. interest rates. The minutes prompted choppy trading in the stock and currency markets, and pushed U.S. Treasury yields up. The FOMC minutes contained elements that could be deemed as both hawkish and dovish on U.S. monetary policy.
The key outside markets on Thursday morning see the U.S. dollar index slightly up. Meantime, Nymex crude oil prices are weaker and trading just above $61.00 a barrel. Oil traders are awaiting today’s weekly U.S. oil stocks report.
U.S. economic data due for release Thursday includes the weekly jobless claims report, leading economic indicators, the weekly DOE liquid energy stocks report, and the Kansas City Fed manufacturing survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 2,725.00 and then at last week’s high of 2,754.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,682.00 and then at 2,660.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are slightly higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 6,800.00 and then at 6,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,694.75 and then at 6,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are slightly higher in early U.S. trading, on tepid short covering after hitting a contract low on Wednesday. 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 142 8/32 and then at 143 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 141 22/32 and then at the contract low of 141 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are slightly higher in early U.S. trading. Bears have the solid overall near-term technical advantage as prices hover near the recent contract 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 this week’s high of 120.02.5 and then at 120.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 119.14.0 and then at 119.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly firmer in early U.S. trading, on a corrective rebound after hitting a contract and multi-year low last week. Bears still have the overall near-term technical advantage. However, more gains today and Friday would suggest a near-term market bottom is in place. The shorter-term moving averages for the dollar index are neutral 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 89.780 and then at 90.000. Shorter-term support is seen at 89.500 and then at 89.135. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are slightly lower in early U.S. trading. Look for buy stops to reside just above technical resistance at this week’s high of $62.65 and then at $63.00. Look for sell stops just below technical support at the overnight low of $60.75 and then at $60.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were narrowly mixed overnight. Not much new. The grain markets are still in near-term price uptrends, to suggest more sideways-to-higher price action in the coming days, or longer. The big news event this week is the USDA Ag Outlook Conference that begins today and ends Friday.