Monday, February 5–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The U.S. stock indexes have become very wobbly. Bearish weekly low closes in the indexes on Friday were a technical clue that near-term market tops are in place. Worries about rising interest rates and inflation worldwide, as evidenced by rising world bond yields, have spooked the global equities markets.
The key “outside markets” on Monday morning see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are weaker and trading above $65.00 a barrel.
The new Federal Reserve chairman, Jerome Powell, will be sworn in today.
U.S. economic data due for release Monday includes the U.S. services purchasing managers index (PMI) the employment trends index, the ISN non-manufacturing report on business, and the global services PMI.
–Jim
U.S. STOCK INDEXES
March S&P 500 December e-mini futures: Prices are lower and hit a four-week low in early U.S. trading. There are now chart clues the market has put in a near-term top. 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 above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,757.00 and then at 2,775.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,733.00 and then at 2,725.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
March Nasdaq index December futures: Prices are lower and hit a three-week low in early U.S. trading. There are now chart clues 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 and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 6,763.25 and then at 6,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 6,710.00 and then at 6,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower in early U.S. trading and hit another contract low. Bears 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 145 even and then at 145 16/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight contract low of 144 3/32 and then at 143 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 higher on short covering after hitting another contract low overnight. Bears 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 121.06.5 and then at 121.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 120.18.0 and then at 120.16.0. 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 slightly 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 bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.220 and then at 89.480. Shorter-term support is seen at the overnight low of 88.870 and then at last week’s low of 88.385. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
March Nymex crude oil prices are modestly lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Look for buy stops to reside just above technical resistance at the overnight high of $65.40 and then at $66.00. Look for sell stops just below technical support at the overnight low of $64.62 and then at $64.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Grain futures were lower overnight. Grain markets are seeing some chart consolidation after recent gains. The long bear market in the grains still appears to have ended. Traders will closely examine this morning’s weekly USDA export inspections report.