Friday, January 21–Jim Wyckoff’s Morning Markets Report
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Risk appetite has receded this week. Inflation fears that are growing have put pressure on paper assets recently—namely stocks and bonds. Technical damage has been inflicted in the S&P 500 and the Nasdaq stock indexes that suggests those markets have put in at least near-term tops. Geopolitics are also in play early this year as the U.S. and Russia are in a stare-down over Russia’s aggression ambitions against Ukraine.
Crypto currencies are also feeling the heat this week, with Bitcoin hitting its lowest level since August.
The key outside markets today see crude oil prices down and trading around $84.00 a barrel. The U.S. dollar index is a bit weaker early today. The U.S. Treasury 10-year note yield is presently fetching 1.792%.
U.S. economic data due for release Friday is light and includes leading economic indicators.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are lower in early U.S. trading and hit a three-month low overnight. Bulls have faded badly recently, to suggest a market top is in place. 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 bearish early today. Today, shorter-term technical support comes in at the overnight low of 4,429.50 and then at 4,400.00. Sell stops likely reside just below those levels. Resistance for active traders is seen at the overnight high of 4,477.75 and then at 4,500.00. Buy stops likely reside just above those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index futures: Prices are lower in early U.S. trading and hit another three-month low overnight. Bulls have faded badly to suggest a market top is 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 and 18-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 the overnight high of 14,816.50 and then at 15,000.00. On the downside, shorter-term support is seen at the overnight low of 14,602.25 and then at 14,500.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are higher in early U.S. trading on short covering. Bears still have the solid overall near-term technical advantage. Prices have been trending lower for six weeks. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 155 22/32 and then at 156 even. Shorter-term support lies at the overnight low of 154 25/32 and then at 154 even. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher in early U.S. trading. 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 bullish early today. Shorter-term resistance lies at the overnight high of 128.10.0 and then at 128.16.0. Shorter-term technical support lies at the overnight low of 127.28.0 and then at 127.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The March Euro currency futures are slightly higher in early U.S. trading. Bears have the firm overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the Euro are neutral early today. The Euro currency finds shorter-term technical resistance at 1.1400 and then at this week’s high of 1.1447. Shorter-term support is seen at the overnight low of 1.1312 and then at the January low of 1.1287. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are lower in early U.S. trading. Bulls still have the solid overall near-term technical advantage amid a six-week-old price uptrend in place on the daily chart. 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 bearish early today. Look for buy stops to reside just above technical resistance at $85.00 and then at this week’s high of $87.10. Look for sell stops just below technical support at the overnight low of $82.78 and then at $82.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
U.S. grain futures are weaker in early U.S. pre-market trading, on corrective pullbacks from recent good gains. On tap today is the weekly USDA export sales report. The corn and soybean markets are being supported by very dry weather in South American growing regions. Corn and bean bulls have the firm overall near-term technical advantage. Wheat prices are still trending lower on the daily bar charts, but the bulls have gained momentum this week.
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