Wednesday, January 31–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mixed but mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following the solid losses posted Tuesday.
In overnight news, the Euro zone reported its consumer price index for January at up 1.3% versus up 1.4% in December, year-on-year. The January number was in line with market expectations.
Tuesday evening President Trump delivered his first state-of-the-union speech. Trump’s remarks did not have a major impact on the markets.
The Federal Open Market Committee (FOMC) meeting concludes Wednesday afternoon with a statement. No changes in U.S. monetary policy are expected. However, the FOMC statement could contain clues about the timing of futures interest rate increases from the Fed. This will be Fed Chair Janet Yellen’s last FOMC meeting.
Traders are awaiting Friday morning’s monthly U.S. employment situation report from the Labor Department. This is arguably the most important U.S. data point of the month.
The key “outside markets” on Wednesday morning see the U.S. Dollar Index lower. Meantime, Nymex crude oil prices are also lower and trading just above $64.00 a barrel.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the employment cost index, the ISM Chicago business survey, pending home sales index, and the weekly DOE liquid energy stocks report.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are firmer in early U.S. trading, on a rebound from Tuesday’s solid losses. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are still 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 early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 2,858.00 and then at the contract high of 2,878.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 2,818.50 and then at 2,810.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
March Nasdaq index December futures: Prices are higher in early U.S. trading. The bulls have the firm overall near-term technical advantage. 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 early today. Shorter-term technical resistance is seen at the overnight high of 6,975.75 and then at 7,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,936.75 and then at this week’s low of 6,902.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are firmer in early U.S. trading, on short covering after hitting another contract low on Tuesday. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 148 even and then at Tuesday’s high of 148 11/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 147 10/32 and then at the contract low of 147 4/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
March U.S. T-Notes: Prices are near higher on short covering after hitting another contract low Tuesday. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 121.27.5 and then at 122.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 121.17.0 and then at 121.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March U.S. dollar index is lower in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the dollar index are bearish as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are neutral to bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.085 and then at this week’s high of 89.480. Shorter-term support is seen at the overnight low of 88.645 and then at last week’s low of 88.255. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
March Nymex crude oil prices are weaker in early U.S. trading, on more profit taking. Bulls still have the firm overall near-term technical advantage. Look for buy stops to reside just above technical resistance at $65.00 and then at Tuesday’s high of $65.56. Look for sell stops just below technical support at the overnight low of $63.67 and then at $63.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were weaker overnight, on downside corrections from recent good gains. Grain market bulls still have near-term technical momentum on their side, to suggest price uptrends can be sustained. The long bear market in the grains finally appears to have ended.