Friday, February 2–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The U.S. stock indexes have become wobbly this week. Bearish weekly low closes in the indexes on Friday would be a technical clue that near-term market tops are in place.
In overnight news, the Euro zone December producer price index was reported up 0.2% from November and up 2.2%, year-on-year. Those numbers were in line with market expectations.
Traders and investors are awaiting Friday morning’s monthly U.S. employment situation report from the Labor Department. This is arguably the most important U.S. data point of the month. The key non-farm payrolls number consensus forecast comes in at up 177,000. A miss from the forecasts on this number is likely to prompt markets volatility in the immediate aftermath of the 7:30 a.m. CST jobs report.
The key “outside markets” on Friday morning see the U.S. Dollar Index higher on a tepid corrective bounce after closing at a more-than-three-year low close on Thursday. Meantime, Nymex crude oil prices are near steady and trading just below $66.00 a barrel. The U.S. Energy Information Administration has reported that U.S. crude oil production has risen above 10 million barrels a day for the first time in 50 years.
Other U.S. economic data due for release Friday includes the ISM New York report on business, manufacturers’ shipments and inventories, and the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are lower and hit a two-week low in early U.S. trading. Bulls still have the overall near-term technical advantage, but are fading now. The 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 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 2,825.00 and then at the overnight high of 2,831.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,797.00 and then at 2,790.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index December futures: Prices are solidly lower in early U.S. trading. The bulls still have the overall near-term technical advantage, but are fading. 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 6,875.00 and then at 6,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,825.00 and then at 6,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower again in early U.S. trading and hit another contract low. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 146 12/32 and then at 147 even. Buy stops likely reside just above those levels. Shorter-term support lies at the contract low of 145 25/32 and then at 145 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
March U.S. T-Notes: Prices are lower and hit another contract low overnight. 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 early today. Shorter-term resistance lies at 121.10.5 and then at 121.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 121.02.0 and then at 121.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is modestly higher in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 88.775 and then at 89.000. Shorter-term support is seen at this week’s low of 88.385 and then at the January low of 88.255. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are near steady in early U.S. trading. Bulls still have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $66.30 and then at the January high of $66.66. Look for sell stops just below technical support at $65.00 and then at $64.63. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Grain futures were slightly lower overnight. Grain markets are seeing some chart consolidation this week, after recent gains. The long bear market in the grains finally appears to have ended.