Wednesday, February 21–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Volatility in the U.S. stock market picked up Tuesday, and traders are wondering if such will continue today.
The highlight of the trading week will be the release today of the minutes of the last FOMC meeting of the Federal Reserve. The minutes are due out at 2:00 p.m. eastern time. Past FOMC minutes releases have been markets-movers. Keep in mind the last FOMC meeting occurred before the big increase in volatility in the stock markets.
In overnight news, the Euro zone’s Markit composite purchasing managers index (PMI) fell to 57.5 in February versus 58.8 in January, for a three-month low. The weaker February number was in line with market expectations.
The key outside markets on Wednesday morning see the U.S. dollar index firmer on a corrective rebound from recent selling pressure. The dollar index hit a three-year low last week. Meantime, Nymex crude oil prices are weaker early today and trading just above $61.00 a barrel.
There is a heavy slate of U.S. economic data due for release Wednesday, including the FOMC minutes, the weekly Johnson Redbook and Goldman Sachs retail sales reports, the weekly MBA mortgage applications survey, the U.S. flash services and manufacturing PMI numbers, and existing home sales.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are slightly lower in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 2,725.00 and then at last week’s high of 2,754.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,700.00 and then at 2,688.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
March Nasdaq index December futures: Prices are slightly lower in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at the overnight high of 6,815.25 and then at this week’s high of 6,843.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 6,750.00 and then at this week’s low of 6,723.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are slightly higher in early U.S. trading, on tepid short covering. 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 technical resistance is seen at this week’s high of 143 13/32 and then at 143 26/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 142 26/32 and then at this week’s low of 142 13/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are slightly higher 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 early today. Shorter-term resistance lies at this week’s high of 120.02.5 and then at 120.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.27.5 and then at this week’s low of 119.18.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is firmer in early U.S. trading, on a corrective rebound after hitting a contract and multi-year low last week. Bears still have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral 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 dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 89.750 and then at 90.000. Shorter-term support is seen at the overnight low of 89.285 and then at 89.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are weaker in early U.S. trading. Look for buy stops to reside just above technical resistance at today’s high of $61.70 and then at $62.00. Look for sell stops just below technical support at the overnight low of $61.29 and then at $61.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were narrowly mixed overnight. The grain markets are still in near-term price uptrends, to suggest more sideways-to-higher price action in the coming days, or longer.