Thursday, February 8–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed to lower overnight, following losses in the U.S. stock indexes Wednesday. U.S. stock indexes are pointing toward mixed openings then the New York day session begins. Serious near-term technical damage has been inflicted on the U.S. stock indexes recently, to suggest they have finally topped out for at least the near term.
In overnight news, the Chinese yuan dropped by around 1% against the U.S. dollar for its biggest daily decline since the yuan was devalued in 2015.
Dallas Federal Reserve Bank President Robert Kaplan said overnight he believes the Fed should raise U.S. interest rates three times in 2018, based upon continued strong U.S. economic growth and falling unemployment levels.
German Bundesbank President Jens Weidmann on Thursday called on the European Central Bank to end its quantitative easing program by this fall.
The key “outside markets” on Thursday morning see the U.S. dollar index higher again on some more safe-haven demand. There are now early technical clues that USDX has put in a market bottom. Meantime, Nymex crude oil prices are weaker and trading just above $61.00 a barrel. There are now early chart signals the crude market has topped out.
U.S. economic data due for release Thursday includes the weekly jobless claims report and monthly chain store sales reports.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are modestly lower in early U.S. trading. Major near-term chart damage has been inflicted recently to suggest the index has put in at least a near-term market top. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,679.25 and then at 2,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,645.25 and then at 2,625.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index December futures: Prices are slightly lower in early U.S. trading. With this week’s major near-term chart damage, there are chart clues that at least a near-term 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 neutral early today. Shorter-term technical resistance is seen at the overnight high of 6,597.00 and then at 6,625.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,490.00 and then at 6,450.00. 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 weaker in early U.S. trading and close to this week’s 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 144 31/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at the contract low of 144 3/32 and then at 143 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 near steady in early U.S. trading. 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 resistance lies at the overnight high of 121.08.0 and then at 121.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120.29.0 and then at 120.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is higher and hit a three-week high in early U.S. trading. Bears still have the overall near-term technical advantage, but the recent good rally suggests a 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 below 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 90.450 and then at 90.750. Shorter-term support is seen at the overnight low of 90.030 and then at 89.500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
March Nymex crude oil prices are lower and hit a four-week low in early U.S. trading. Bulls still have the overall near-term technical advantage, but have faded to suggest a near-term market top is in place. Look for buy stops to reside just above technical resistance at the overnight high of $61.78 and then at $62.00. Look for sell stops just below technical support at $61.00 and then at $60.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Grain futures were narrowly mixed overnight. Grain market bulls have regained some upside momentum this week, especially the wheat bulls. Focus is on this morning’s USDA weekly export sales report and on the USDA monthly supply and demand report.