Monday, March 11–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The Dow Jones Industrial average is pointed lower mainly due to a big drop in Boeing shares after another one of its airliners crashed in Africa over the weekend.
Traders and investors are mostly upbeat to start the trading week, following dour economic data out of the U.S. and China late last week. The U.S jobs report last Friday showed a sharp drop in the growth of non-farm payrolls, while China’s latest import and export numbers were down.
The U.S.-China trade talks appear to be moving closer to a formal agreement following a report over the weekend that the head of China’s central bank said his country will not devalue the yuan to boost China’s exports.
U.S. Federal Reserve Chairman Jerome Powell, in a rare TV interview on Sunday, reiterated the U.S. economic outlook is favorable and said there is no need to raise or lower interest rates at present.
The key outside markets today see the U.S. dollar index firmer and not far below last week’s new high for the year. Nymex crude oil prices are firmer and trading around below $56.50 a barrel. Crude has been trading sideways for the past two weeks. The International Energy Agency today reported the U.S. will become the world’s largest oil exporter by 2021—surpassing both Saudi Arabia and Russia. The U.S. is already the world’s largest oil producer, due to the boom in shale-oil production.
U.S. economic reports due for release Monday include retail sales, manufacturing and trade inventories, and the employment trends index. President Trump also releases his fiscal year 2020 budget.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are near steady in early U.S. trading. The price uptrend on the daily bar chart has “rolled over” and been negated to suggest a near-term market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at last Thursday’s high of 2,781.75 and then at 2,800.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 2,726.50 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
June Nasdaq index futures: Prices are firmer in early U.S. trading. A price uptrend on the daily bar chart has been negated to suggest a near-term market top is in place. 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 bearish early today. Shorter-term technical resistance is seen at Thursday’s high of 7,151.50 and then at 7,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,024.75 and then at 7,000.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are lower in early U.S. trading today, on a downside correction from last week’s good gains. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 technical resistance is seen at the overnight high of 146 even and then at 146 17/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 145 11/32 and then at 145 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are lower in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 122.25.0 and then at last week’s high of 122.30.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 122.16.0 and then at 122.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The June U.S. dollar index is near steady in early U.S. trading. Prices hit a new high for the year last Thursday. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index 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 for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 97.000 and then at last week’s high of 97.160. Shorter-term support is at 96.540 and then at 96.270. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
April Nymex crude oil prices are firmer in early U.S. trading. Trading has been choppy and sideways recently. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bullish early today. Look for buy stops to reside just above technical resistance at the overnight high of $56.79 and then at $57.00. Look for sell stops just below technical support at $56.00 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were mixed overnight. Traders are awaiting this morning’s weekly USDA export inspections report and daily export sales report—looking for more purchases from China. Grain market bears still have the overall near-term technical advantage.
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