Wednesday, March 23–Jim Wyckoff’s Morning Markets Report
Global stocks markets were mostly higher overnight. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The Russia-Ukraine war continues but from a markets perspective not much has changed recently. President Biden Thursday meets with NATO and EU leaders to discuss Russia’s invasion of Ukraine. The two-day summit will be held at NATO headquarters in Brussels. Sanctions continue to bite Russia’s economy and its ability to make war. Bloomberg reports that “for decades, global finance firms eagerly catered to Russian companies, billionaires and the government. In perhaps the harshest and fastest exclusion in living memory of a major industrialized economy, the past few weeks have been a frantic dash to understand and implement sanctions on Russia that are being continually updated by the U.S., U.K. and the EU.”
The other element very near the front burner of the marketplace is inflation worries. Global bond market yields have been rising sharply, with U.S. Treasury yields nearing three-year highs. The U.S. 2-year and 10-year yield curve is very close to inverting, which would begin to suggest a U.S. economic recession is coming.
The key outside markets see Nymex crude oil prices higher and trading around $111.50 a barrel. Oil prices are rising sharply again on ideas the European Union is moving closer to banning oil imports from Russia. The U.S. dollar index is firmer today. The benchmark U.S. 10-year Treasury note is presently yielding 2.375%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 4,514.00 and then at 4,550.00. Support for active traders is seen at this week’s low of 4,415.00 and then at 4,400.00. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are down a bit in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above 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 14,690.75 and then at 15,000.00. On the downside, shorter-term support is seen at 14,500.00 and then at this week’s low of 14,183.75. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady after hitting contract low overnight. Bears are in solid command. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at 149 even and then at 150 even. Shorter-term support lies at the overnight contract low of 147 21/32 and then at 147 even. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are firmer and did hit a contract low overnight. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Tuesday’s high of 123.11.5 and then at 123.16.0. Shorter-term technical support lies at the overnight contract low of 122.12.0 and then at 122.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
EURO CURRENCY
The June Euro currency futures are slightly lower in early U.S. trading. Bears have the overall near-term technical advantage. The shorter-term moving averages for the Euro are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are neutral to bearish early today. The Euro currency finds shorter-term technical resistance at this week’s high of 1.1104 and then at last week’s high of 1.1172. Shorter-term support is seen at this week’s low of 1.0994 and then at last week’s low of 1.0936. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Nymex crude oil prices are solidly higher in early U.S. trading. The shorter-term moving averages are neutral early today 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 (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at this week’s high of $113.35 and then at $115.00. Look for sell stops just below technical support at $110.00 and then at the overnight low of $108.38. Wyckoff’s Intra-Day Market Rating: 6.5
GRAINS
U.S. grain futures prices were higher in early U.S. pre-market trading. Bulls are having a good week. Corn and soybean market bulls remain in firm overall technical control and wheat futures are slightly bullish. Geopolitics remains the main driver of the grains and that suggests volatility continuing to be elevated for at least the near term. The all-important USDA planting intentions report on March 31 is coming into view for grain traders.
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