Friday, March 23–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were solidly lower overnight and U.S. stock indexes are also pointed toward losses when the New York day session begins. The specter of a heated trade war between the world’s two largest economies has the marketplace spooked to end the trading week. The U.S. on Thursday slapped new trade sanctions on China, and China responded by announcing its own import tariffs on U.S. goods.
U.S. stock indexes have seen fresh chart damage inflicted this week, to suggest the Nasdaq has topped out, and to better confirm the S&P 500 hit its major top in January.
Safe-haven gold and U.S. Treasuries are getting price boosts on the potential trade war between the U.S. and China.
President Trump ousted his national security advisor Thursday and appointed John Bolton, a TV commentator who many consider very hawkish on U.S. foreign policy. This news may also be causing some stress in the marketplace.
The key “outside markets” on Friday morning see the U.S. dollar index weaker. Trading in the USDX has been choppy but the bears have gained some momentum late this week. Meantime, Nymex crude oil prices are slightly higher. Oil bulls have had a very good week, which saw prices hit a seven-week high on Wednesday.
U.S. economic data due for release Friday includes durable goods orders, and new residential sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 December e-mini futures: Prices are lower and hit a six-week low in early U.S. trading. 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 resistance comes in at the overnight high of 2,647.00 and then at 2,675.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,617.00 and then at 2,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index December futures: Prices are lower and hit a six-week low in early U.S. trading. 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 6,695.25 and then at 6,750.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,594.25 and then at 6,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are near steady in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above 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 145 16/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term support lies at 144 16/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are firmer in early U.S. trading, on short covering. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 120.28.0 and then at 121.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 120.16.0 and then at 120.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The June U.S. dollar index is lower in early U.S. trading today. The shorter-term moving averages for the dollar index are neutral as the 4-day is even with the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 89.500 and then at this week’s high of 90.025. Shorter-term support is seen at this week’s low of 88.990 and then at 89.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
May Nymex crude oil prices are firmer in early U.S. trading. Bulls have gained momentum this week, to suggest a push to a new multi-year high soon. Look for buy stops to reside just above technical resistance at the overnight high of $65.42 and then at the January high of $66.02. Look for sell stops just below technical support at $64.00 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were solidly lower overnight, on worries about U.S. grain exports being curtailed amid the potential outbreak of a world trade war. Weekly USDA export sales data is out today.