Wednesday, March 9–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mixed overnight, with European shares mostly up and Asian shares mostly down. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. The U.S. indexes are seeing corrective bounces following recent losses, but are still in near-term price downtrends on the daily charts. Risk aversion remains elevated amid the ongoing Russia-Ukraine war. More and more U.S. companies are pulling away from Russia, including McDonalds and Coca Cola.
Nickel futures are not trading anywhere in the world at present after prices in Shanghai hit their daily limit higher Wednesday. Reports said a single stockpiler had amassed over 50% of all London Metals Exchange nickel inventories, representing around 43,000 metric tons. Trading of nickel on the Shanghai Futures Exchange saw prices surge 17% to the daily limit. Nickel on the LME was suspended Tuesday after prices surged 250% in the first two days of trading this week. Trading on the LME will not resume before Friday, said the exchange. Reports also said a big nickel futures trader in China, called Big Shot, was caught in a major “short squeeze” of over 200,000 metric tons in futures contracts, valued at around $8 billion. The reports said Big Shot, now called Little Shot by traders, is working with banks to unwind his big loss and avoid default.
Bitcoin prices are sharply higher today. Gold prices are down on a corrective pullback after Comex futures hit a record intra-day high on Tuesday.
The key outside markets see Nymex crude oil prices lower and trading around $120.50 a barrel. The U.S. dollar index is lower today after hitting a 21-month high Monday. The benchmark U.S. 10-year Treasury note is presently yielding 1.903%. Treasury yields are on the rise at mid-week.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are solidly higher in early U.S. trading, on short covering. Prices are still trending lower on the daily bar chart and the bears are in firm 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at this week’s high of 4,317.00 and then at 4,366.25. 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: 6.5
June Nasdaq index futures: Prices are higher in early U.S. trading, on short covering. Bears are still 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 neutral 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: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 157 21/32 and then at 158 even. Shorter-term support lies at 156 even and then at 155 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 127.14.5 and then at 127.20.0. Shorter-term technical support lies at 126.20.0 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
EURO CURRENCY
The June Euro currency futures are higher on more short covering after hitting a nearly two-year low on Monday. Bears still 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 to bullish early today. The Euro currency finds shorter-term technical resistance at the overnight high of 1.1030 and then at 1.1100. Shorter-term support is seen at the overnight low of 1.0928 and then at this week’s low of 1.0845. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Nymex crude oil prices are lower in early U.S. trading. Bulls still have the solid overall near-term technical advantage but may be exhausted or close to it. 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 to bearish today. Look for buy stops to reside just above technical resistance at $122.50 and then at $125.00. Look for sell stops just below technical support at this week’s low of $115.54 and then at $112.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures prices were mixed in volatile 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. However, the Russia-Ukraine war will keep grain futures prices elevated. Look for continued high daily price volatility in the near term. Traders are looking ahead to the monthly USDA supply and demand report on Wednesday morning.
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