Tuesday, March 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. U.S. stock indexes are at multi-month highs and enjoying price uptrends on the daily bar charts.
In overnight news, the unofficial China purchasing managers’ index (PMI) for February came in at its lowest level since October. China also on Tuesday lowered its projected gross domestic product growth for the year. The National People’s Congress lowered its 2019 GDP growth estimate to a rate of 6.0% to 6.5%, from 6.5%. Chinese economic officials also pledged to continue to support the manufacturing sector and emerging businesses, including new deficit spending and tax cuts. The trade war with the U.S. the past year has dented the Chinese economy, which in turn has likely made Chinese leadership keen to end its trade war with the U.S. China is holding its National People’s Congress annual conference this week.
Attention of the marketplace later this week will be on the European Central Bank’s regular monetary policy meeting on Thursday. The ECB is expected to loosen its purse strings and provide more low-interest financing to Euro zone banks in order to stimulate an anemic Euro zone economy.
The U.S. March jobs report from the Labor Department is due out Friday morning. That’s arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 180,000.
The key outside markets today see the U.S. dollar index slightly firmer. The greenback bulls have regained some technical strength recently. Nymex crude oil prices are slightly down and trading around $56.50 a barrel.
U.S. economic reports due for release Tuesday include the weekly Goldmand Sachs and Johnson Redbook retail sales reports, new residential sales, the U.S. services purchasing managers’ index (PMI), the global PMI, the IDB/TIPP economic optimism index, the ISM non-manufacturing survey, and the monthly Treasury budget statement.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly higher in early U.S. trading. 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 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 bearish early today. Today, shorter-term technical resistance comes in at Monday’s high of 2,825.75 and then at 2,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,772.50 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
June Nasdaq index futures: Prices are firmer 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 early today. Shorter-term technical resistance is seen at Monday’s high of 7,241.00 and then at 7,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,153.00 and then at Monday’s low of 7,103.75. 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. Bulls have faded recently to suggest more downside price pressure in the near term. 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 bearish early today. Shorter-term technical resistance is seen at Monday’s high of 144 15/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at Monday’s low of 143 16/32 and then at 143 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. Bulls have faded badly recently, to suggest a market top is in place. 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 bearish early today. Shorter-term resistance lies at the overnight high of 121.29.5 and then at 122.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 121.15.5 and then at 121.10.0. 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. Bulls have the overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below 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 overnight high of 96.245 and then at 96.500. Shorter-term support is at Monday’s low of 95.795 and then at 95.500. 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 early today. Look for buy stops to reside just above technical resistance at $57.00 and then at last week’s high of $57.88. Look for sell stops just below technical support at $55.50 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were again narrowly mixed overnight. This week’s news of a likely U.S.-China trade agreement being finalized this month has not given the bulls much of a boost. Bulls want more specifics on China’s commitment to buy U.S. ag products, and have been disappointed by the low level of Chinese purchases of U.S. ag products after that country had recently pledged to purchase more U.S. goods.
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