Wednesday, March 13–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward steady to narrowly mixed openings when the New York day session begins. There are still no major geopolitical hotspots to roil the marketplace and dent the keener trader and investor risk appetite.
British lawmakers voted late Tuesday on another Brexit plan offered by Prime Minister Theresa May, but despite some last-minute concessions from the European Union, the U.K. Parliament voted down May’s plan. The British pound was pressured on the news, even though a no-vote was expected by the marketplace. The U.K. is scheduled to leave the EU at month’s end.
In other overnight news, the Euro zone industrial output in January rose 1.4% from December but was down 1.1%, year-on-year. Those numbers were better than expectations but they also underscore an anemic Euro zone economy.
Gold prices are solidly higher and hit a two-week high overnight on chart-based buying and perceived bargain hunting following losses in late-February and early March.
The U.S. economic data point of the day is the producer price index report for February, seen up 0.2% from January. Tuesday’s U.S. consumer price index report was also tame and did help to lift U.S. Treasury prices.
The outside markets today see the U.S. dollar index slightly lower on a corrective pullback from recent gains that put the index at a new high for the year last week. Nymex crude oil prices are firmer and trading around $57.50 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the producer price index, durable goods orders, construction spending and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly up in early U.S. trading. Bulls have regained upside momentum this week. 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 and 18-day. The 9-day is even with 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 the March high of 2,825.75 and then at 2,831.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2.741.75 and then at last week’s low of 2,726.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are slightly up in early U.S. trading. Bulls have regained upside technical momentum this week. 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 the March high of 7,241.00 and then at 7,275.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 7,188.00 and then at 7,150.00. 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 weaker in early U.S. trading today following good gains Tuesday. 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 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 13/32 and then at 146 17/32. Buy stops likely reside just above those levels. Shorter-term support lies at 145 11/32 and then at this week’s low of 145 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
June U.S. T-Notes: Prices are weaker 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 122.31.0 and then at 123.05.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 122.17.0 and then at this week’s low of 122.12.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly weaker in early U.S. trading, on a corrective pullback. Prices hit a new high for the year last week. Bulls still 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 bearish early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 96.725 and then at this week’s high of 96.895. Shorter-term support is at this week’s low of 96.275 and then at 96.000. Wyckoff’s Intra Day Market Rating: 4.5
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 bullish early today. Look for buy stops to reside just above technical resistance at the March high of $57.88 and then at $58.00. Look for sell stops just below technical support at $57.00 and then at this week’s low of $55.96. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures were lower overnight. Grain market bears still have the overall near-term technical advantage amid overall worldwide slack demand for U.S. ag products.
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