Friday, February 22–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly up overnight, with China’s shares leading advances in Asia. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Upbeat trader and investor attitudes have been bolstered this week by perceptions the U.S. and China are moving closer to an agreement to end their trade war.
In overnight news, Canadian press “The Globe and Mail” has reported Barrick Gold is considering a hostile takeover of its rival Newmont Mining Corp. If completed, this would be one of the largest mining company mergers ever.
In other news, the Euro zone producer price index for January came in at down 0.1% on the month and up 1.4%, year-on-year. Those numbers were very close to being in line with market expectations and continue a theme of non-problematic worldwide inflation pressures.
The closely watched German Ifo business confidence index dropped to a four-year low in February. “The German economy remains weak,” said an Ifo official. That’s not good news for the already-anemic European Union economy, whose workhorse is Germany.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are firmer and trading around $57.50 a barrel.
There are no major U.S. economic reports due for release Friday. However, there is a U.S. Monetary Policy Forum held, featuring Fed officials speaking and a report released on monetary policy.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading and near this week’s nearly three-month high. Prices are in an uptrend on the daily bar chart and the bulls have the firm near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 2,800.00 and then at 2,820.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,764.25 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
March Nasdaq index December futures: Prices are higher and near this week’s nearly three-month high in early U.S. trading. Prices are in an uptrend on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at this week’s high of 7,113.75 and then at 7,169.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 7,005.00 and then at 6,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
March U.S. T-Bonds: Prices are firmer in early U.S. trading today. Trading has been choppy this week. Bulls still have the firm overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with 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 Thursday’s high of 146 25/32 and this week’s high of 147 5/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 145 17/32 and then at 145 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are near steady in early U.S. trading. Bulls still have the firm overall chart advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 122.00.0 and then at Thursday’s high of 122.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 121.25.5 and then at 121.21.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly up in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 96.540 and then at this week’s high of 96.930. Shorter-term support is at this week’s low of 96.120 and then at 96.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are firmer and hit another three-month high overnight. The shorter-term moving averages are bullish early today as the 4-day is above the 9-day. The 9-day is above 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 $58.00 and then at $59.00. Look for sell stops just below technical support at $57.00 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were narrowly mixed overnight. The U.S.-China trade deal hopes have given the bulls a bit of a lift late this week. Friday sees the USDA Ag Outlook Forum conclude and USDA will also release some more backed-up export sales reports that will likely move the markets.
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