Tuesday, February 12–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite in the marketplace this week remains keener, what with no major geopolitical events in play at present.
Traders and investors were cheered to see reports the Democrats and President Trump may be close to reaching a formal agreement on a budget that would avoid another government shutdown later this week. The reports said a tentative agreement was reached on Monday.
Focus of the marketplace this week is also on U.S.-China high-level trade talks taking place in Beijing. U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer will attend the talks, likely to take place with them present later this week. Many traders and investors are upbeat that a deal can be reached by the March 1 deadline.
The key outside markets today see the U.S. dollar index slightly lower following recent strong gains that pushed the index to a two-month high on Monday. Nymex crude oil prices slightly are firmer and trading just above $53.00 a barrel.
U.S. economic reports due for release Tuesday include the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index. Several Federal Reserve officials speak today, including Chairman Jerome Powell.
–Jim
U.S. STOCK INDEXES
March S&P 500 e-mini futures: Prices are higher in early U.S. trading. Prices are in an uptrend on the daily bar chart and the bulls have the near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 2,737.75 and then at 2,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,700.50 and then at last week’s low of 2,680.75. 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 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 neutral early today. The 4-day moving average is below 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 7,000.00 and then at the February high of 7,038.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 6,896.25 and then at last week’s low of 6,841.00. 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 weaker again in early U.S. trading today. Bulls still have the firm overall near-term technical advantage but trading has been choppy the past month. 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 to bearish early today. Shorter-term technical resistance is seen at the overnight high of 146 18/32 and then at 147 1/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 145 30/32 and then at 145 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 lower in early U.S. trading. Bulls still have the firm overall chart advantage but trading has been choppy. 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 bearish early today. Shorter-term resistance lies at the overnight high of 122.06.5 and then at Monday’s high of 122.13.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 121.29.5 and then at 121.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is near steady and hit a two-month high in early U.S. trading. Bulls have upside momentum. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above 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 the December high of 97.195 and then at 97.500. Shorter-term support is at Monday’s low of 96.410 and then at 96.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
March Nymex crude oil prices are higher in early U.S. trading. The shorter-term moving averages are neutral early today 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 (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at $54.00 and then at $55.00. Look for sell stops just below technical support at the overnight low of $52.29 and then at Monday’s low of $51.23. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were mixed to firmer overnight. The recent surge in the U.S. dollar index is holding back buying interest in the grains. Also, U.S. export demand needs to pick up to provide a boost to the grains.
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