Jim Wyckoff's Daily Markets Update - February 14, 2018

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The STOCK INDEXES

 

The March NASDAQ 100 closed sharply higher on Wednesday as it recovered from an early-session selloff triggered by a bearish report on inflation that showed the strongest monthly rise in five-months. Following the early-session sell off, investors came in to buy the dip and push the index higher for the fourth-day in a row. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 6758.93 are needed to confirm that a short-term low has been posted. If March renews the decline off January's high, the October 25th low crossing at 6024.00 is the next downside target. First resistance is last Wednesday's high crossing at 6717.75. Second resistance is the 20-day moving average crossing at 6758.93. First support is the 38% retracement level of the 2017-2018- rally crossing at 6217.75. Second support is the October 25th low crossing at 6024.00.

 

The March S&P 500 closed sharply higher on Wednesday after a rocky start due to a bearish report on inflation. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 2755.70 are needed to confirm that a short-term low has been posted. If March renews the decline off January's high, the September 26th low crossing at 2494.90 is the next downside target. First resistance is last Wednesday's high crossing at 2725.50. Second resistance is the 20-day moving average crossing at 2755.70. First support is the 38% retracement level of the 2016-2018-rally crossing at 2529.20. Second support is the September 26th low crossing at 2494.90.

 

The Dow closed sharply higher on Wednesday as it extends the rally off last Friday's low. The Dow rallied to session highs after reversing opening losses following the release of the latest inflation data that showed the strongest monthly rise in five months. The report spooked investors anxious that the Federal Reserve may be compelled to aggressively to tamp down rising prices by hiking rates a rapid clip in 2018. However, some investors characterized the initial sell off as a knee-jerk reaction, as the market shifted to long-term bullish fundamentals, which including healthy earnings and an economy that appears to be relatively solid. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading.

Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20- day moving average crossing at 25,522.53 are needed to confirm that a short-term low has been posted. If the Dow resumes the decline off January's high, November's low crossing at 23,242.75 is the next downside target. First resistance is the 10-day moving average crossing at 24,800.16. Second resistance is the 20-day moving average crossing at 25,522.53. First support is last Friday's low crossing at 23,360.29.

Second support is November's low crossing at 23,242.75.   

 

INTEREST RATES

 

March T-bonds closed down 1-05/32's at 143-13. March T-bonds closed lower on Wednesday following a bearish read on the latest inflation data. The low-range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off December's high, weekly support crossing at 140-03 is the next downside target. Closes above the 20-day moving average crossing at 146-25 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 144-29. Second resistance is the 20- day moving average crossing at 146-25. First support is Monday's low

crossing at 143-04. Second support is weekly support crossing at 140-03.  

 

March T-notes closed down 21.5/32's at 120-105. March T-notes closed sharply lower on Wednesday as it renewed the decline off the 2017-highs.

The low-range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends this winter's decline, weekly support crossing at 119.170 is the next downside target. Closes above the 20-day moving average crossing at 121.187 are needed to confirm that a low has been posted. First resistance is the 20-day moving average crossing at 121.187. Second resistance is the 50-day moving average crossing at 122.286. First support is today's low crossing at 120.115. Second support is weekly support crossing at

119.170.  

 

ENERGY MARKETS

 

March crude oil closed higher due to friendly inventory data on Wednesday. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that a short- term low might be in or is near. Closes above the 20-day moving average crossing at 63.28 are needed to confirm that a short-term low has been posted. If March extends the decline off January's high, the 38% retracement level of the 2016-2018-rally crossing at 55.87 is the next downside target. First resistance  is the 10-day moving average crossing at 61.85. Second resistance is the 20-day moving average crossing at 63.28.First support is last Friday's low crossing at 58.07. Second support is the 38% retracement level of the 2016-2018-rally crossing at 55.87.

 

March heating oil closed higher due to short covering on Wednesday as it consolidates some of the decline off January's high. The high-range close sets the stage for a steady to higher opening when Thursday's night trading session begins. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 201.04 are needed to confirm that a short-term low has been posted. If March extends the decline off January's high, the 50% retracement level of the June-January-rally crossing at 178.38 is the next downside target. First resistance is the 10-day moving average crossing at 193.83. Second resistance is the 20-day moving average crossing at 201.04. First support is the 50% retracement level of the June-January-rally crossing at 178.38. Second support is the 62% retracement level of the June-

January-rally crossing at 170.04.  

 

March unleaded gas closed higher on Wednesday as it consolidated some of the decline off January's high. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading.

Stochastics and the RSI are oversold but are turning neutral to bullish signaling that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 183.35 would confirm that a short-term low has been posted. If March extends the decline off January's high, the 50% retracement level of the June-January-rally crossing at 162.06 is the next downside target. First resistance is the 10-day moving average crossing at 176.98. Second resistance is the 20-day moving average crossing at 183.35. First support is the 50% retracement level of the June-January-rally crossing at 162.06. Second support is the 62%

retracement level of the June-January-rally crossing at 162.06.  

 

March Henry natural gas closed slightly higher on Wednesday as it consolidated some of the decline off January's high. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the aforementioned decline, December's low crossing at 2.532 is the next downside target. Closes above the 20-day moving average crossing at 2.881 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 2.704. Second resistance is the 20-day moving average crossing at 2.881. First support is Monday's low crossing at 2.538. Second support is December's low crossing at 2.532.

 

CURRENCIES

 

The March Dollar closed sharply lower on Wednesday below the 10-day moving average crossing at 89.57 confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends today's decline, January's low crossing at 88.25 is the next downside target. If March renews the rally off January's low, the 38% retracement level of the November-January-decline crossing at 90.71 is the next upside target. First resistance is the 38% retracement level of the November-January- decline crossing at 90.71. Second resistance is the 50-day moving average crossing at 91.25. First support is the reaction low crossing at 88.39. Second support is January's low crossing at 88.25.

 

The March Euro posted a key reversal up and closed higher on Wednesday. Today's close above the 10-day moving average crossing at 123.85 confirms that a short-term low has been posted. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends today's rally, February's high crossing at 125.57 is the next upside target. If March renews the decline off January's high, the 50-day moving average crossing at 121.44 is the next downside target. First resistance is February's high crossing at 125.57. Second resistance is the January high crossing at 126.77. First support is the reaction low crossing at 122.09. Second support is the 50-day moving average crossing at 121.44.    

 

The March British Pound posted a key reversal up as it closed higher on Wednesday. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 1.4038 are needed to confirm that a short-term low has been posted. If March renews the decline off January's high, the 50-day moving average crossing at 1.3729 is the next downside target. First resistance is the 20-day moving average crossing at 1.4038. Second resistance is January's high crossing at 1.4370. First support is last Friday's low crossing at 1.3780. Second support is the 50-day moving average crossing at 1.3729.    

 

The March Swiss Franc closed higher on Wednesday. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral signaling that sideways to higher prices are possible near-term. If March resumes the rally off October's low, the 38% retracement level of the 2015-2016- decline crossing at 1.0994 is the next upside target. Closes below last Thursday's low crossing at 1.0589 are needed to confirm that a short- term top has been posted. First resistance is January's high crossing at 1.0829. Second resistance is the 38% retracement level of the 2015-2016- decline crossing at 1.0994. First support is last Thursday's low crossing at 1.0589. Second support is the 50-day moving average crossing at 1.0417.

 

The March Canadian Dollar posted a key reversal up and closed higher on Wednesday. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bullish hinting that a low might be in or is near. Closes above the 20-day moving average crossing at 80.37 would confirm that a short-term low has been posted. If March extends the decline off January's high, the 75% retracement level of the December- January-rally crossing at 78.56 is the next downside target. First resistance is the 10-day moving average crossing at 79.93. Second resistance is the 20-day moving average crossing at 80.37. First support is the 62% retracement level of the December-January-rally crossing at 79.11. Second support is the 75% retracement level of the December- January-rally crossing at 78.56. 

 

The March Japanese Yen closed higher on Wednesday as it extends the rally off November's low. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off January's low, the 50% retracement level of 2016's trading range crossing at 0.9491 is the next upside target. Closes below the 20-day moving average crossing at 0.9173 would confirm that a short-term top has been posted. First resistance is today's high crossing at 0.9388. Second resistance is the 50% retracement level of 2016's trading range crossing at 0.9491. First support is the reaction low crossing at 0.9073. Second support is the 50-day moving average crossing at 0.9024.  

 

PRECIOUS METALS

 

April gold posted its highest close in nearly three weeks on Wednesday after stronger-than-expected CPI data regarding inflation triggered investors to turn to the precious metal as a hedge against rising prices. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If April extends this week's rally, January's high crossing at 1370.50 is the next upside target. Closes below the 50- day moving average crossing at 1311.70 would confirm that a short-term top has been posted. First resistance is today's high crossing at 1358.60. Second resistance is January's high crossing at 1370.50. First support is the 50-day moving average crossing at 1311.70. Second support is the 50% retracement level of the December-January-rally crossing at 1306.70.

 

March silver posted a key reversal up as it closed higher on Wednesday. The high-range close set the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 16.889 are needed to confirm that a short-term low has been posted. If March resumes the decline off January's high, December's low crossing at 15.635 is the next downside target. First resistance is the 20-day  moving average crossing at 16.889. Second resistance is January's high crossing at 17.705. First support is last Friday's low crossing at 16.130. Second support is December's low crossing at 15.635.    

 

March copper closed sharply higher for the second day in a row on Wednesday as it extended the rally off last Friday's low. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends this week's rally, the reaction high crossing at 325.75 is the next upside target. Closes below the reaction low crossing at 310.80 would confirm that a short-term top has been posted. First resistance is the reaction high crossing at 325.75. Second resistance is the reaction high crossing at 329.10.First support is the 75% retracement level of December's rally crossing at 303.58. Second support is the 87% retracement level of December's rally crossing at 299.03.     

 

GRAINS

 

March Corn closed unchanged at 3.66 3/4. March corn closed unchanged on Wednesday as it consolidates above the 25% retracement level of the July-January-decline crossing at 3.65 1/2. The mid-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off January's low, last September's high crossing at 3.74 1/2 is the next upside target. Closes below the 20-day moving average crossing at 3.59 1/2 would confirm that a short-term top has been posted. First resistance is last October's high crossing at 3.69 1/4. Second resistance is last-September's high crossing at 3.74 1/2. First support is the 20-day moving average crossing at 3.59 1/2. Second support is the 50-day moving average crossing at 3.54. 

 

March wheat closed down 6-cents at 4.54 3/4. March wheat closed lower on Wednesday as it consolidates some of the rally off December's low. The low-range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off January's low, last September's high crossing at 4.82 is the next upside target. Closes below the 20-day moving average crossing at 4.44 3/4 are needed to confirm that a short-term top has been posted. First resistance is Tuesday's high crossing at 4.67 1/4. Second resistance is September's high crossing at 4.82. First support is the 20-day moving average crossing at 4.44 3/4. Second support is the 50-day moving average crossing at 4.32 3/4.     

 

March Kansas City Wheat closed down 4 3/4-cents at 4.69 3/4. March Kansas City wheat closed lower on Wednesday. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are diverging and are turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 4.55 1/2 are needed to confirm that a short-term top has been posted. If March extends the rally off December's high, the 38% retracement level of 2017's trading range crossing at 4.88 1/2. First resistance is last Thursday's high crossing at 4.84 1/2. Second resistance is the 38% retracement level of 2017's trading range crossing at 4.88 1/2. First support is the 10-day moving average crossing at 4.70 1/4. Second support is the 20-day moving average crossing at 4.55 1/2.   

 

March Minneapolis wheat closed down 1 1/2-cents at 6.00 1/4. March Minneapolis wheat closed lower on Wednesday and posted a new low for the winter. The low-range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off January's high, the 87% retracement level of the April-July-rally crossing at 5.89 1/2 is the next downside target. Closes above the 50-day moving average crossing at 6.14 1/4 are needed to confirm that a low has been posted. First resistance is January's high crossing at 6.34 1/2. Second resistance is the reaction high resistance crossing at 6.51. First support is today's low crossing at 5.99 1/2. Second support is the 87% retracement level of the April-July-rally crossing at 5.89 1/2.

 

March soybeans closed up 5 1/4-cents at 10.17. March soybeans closed higher on Wednesday and above the 87% retracement level of the December- January-decline crossing at 10.16 1/4 as it extends the rally off January's low. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the aforementioned rally, December's high crossing at 10.27 is the next upside target. Closes below the 20-day moving average crossing at 9.88 3/4 would confirm that a short-term top has been posted. First resistance is today's high crossing at 10.19 1/2. Second resistance is December's high crossing at 10.27. First support is the reaction low crossing at 9.61 1/4. Second support is January's low crossing at 9.44 1/2.

 

March soybean meal closed up $4.60 at 369.80. March soybean meal closed higher on Wednesday as it extends this year's rally. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off January's low, weekly resistance crossing at 378.80 is the next upside target. Closes below Monday's gap crossing at 344.80 would confirm a short-term top has been posted. First resistance is today's high crossing at 372.10. Second resistance is weekly resistance crossing at 378.80. First support is Monday's low crossing at 344.80. Second support is the 20-day moving average crossing at 340.30.

 

March soybean oil closed up 21 pts. At 31.78. March soybean oil posted an inside day with a higher close on Wednesday as it consolidated some of this year's decline. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off January's high, the July-2016 low crossing at 31.19 is the next downside target. Closes above the 20-day moving average crossing at 32.47 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 32.47. Second resistance is February's high crossing at 33.31. First support is Tuesday's low crossing at 31.40. Second support is the July-2016 low crossing at 31.19.

 

LIVESTOCK

 

April hogs closed up $1.23 at $70.65. April hogs closed higher on Wednesday as it extended the rebound off Monday's low. The high-range close sets the stage for a steady to higher opening when Thursday's session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at 72.62 are needed to confirm that a short-term low has been posted. If April renews the decline off January's high, the 75% retracement level of the August-January-rally crossing at 68.07 is the next downside target. First resistance is the 10-day moving average crossing at 70.93. Second resistance is the 20-day moving average crossing at 72.62. First support is Monday's low 68.55. Second support is the 75% retracement level of the August-January-rally crossing at 68.07.

 

April cattle closed up $0.45 at 125.23. April cattle posted a quiet inside day with a higher close on Wednesday. The mid-range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI have turned neutral to bullish signaling that sideways to higher prices are possible near-term. If April extends the rally off January's low, November's high crossing at 130.10 is the next upside target. Multiple closes below last Friday's low crossing at 122.80 would confirm that a short-term top has been posted. First resistance is the reaction high crossing at 127.38. Second resistance is November's high crossing at 130.10. First support is last Friday's low crossing at 122.80. Second support is January's low crossing at 118.05.

 

March Feeder cattle closed up $0.90 at $148.18. March Feeder cattle closed higher on Wednesday. The high-range close sets the stage for a steady to higher opening when Thursday's session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If March renews the rally off December's low, the reaction high crossing at 154.05 is the next upside target. If March resumes the decline off February's high, the reaction low crossing at 142.42 is the next downside target. First resistance is the reaction high crossing at 154.05. Second resistance is the reaction high crossing at 156.13. First support is the reaction low crossing at 142.42. Second support is January's low crossing at 140.13.  

 

FOOD & FIBER

 

March coffee closed slightly higher on Wednesday. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 50-day moving average crossing at 12.32 are needed to confirms that a short-term low has been posted. If March resumes the decline off January's high, December's low crossing at 11.83 is the next downside target.

 

March cocoa closed sharply higher on Wednesday and in doing so renewed the rally off December's low. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off December's low, the 75% retracement level of the November-December-decline crossing at 21.20 is the next upside target. Closes below the 50-day moving average crossing at 19.42 would confirm that a short-term top has been posted.

 

March sugar closed lower on Wednesday. The low-range close set the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that a short-term top is in or near. If March extends this week's decline, the reaction low crossing at 13.17 is the next downside target. If March resumes the rally off January's low, the 50-day moving average crossing at 14.08 is the next upside target.

 

March cotton closed lower on Wednesday as it renewed the decline off January's high. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off January's high, the 62% retracement level of the October-January-rally crossing at 73.52 is the next downside target. Closes above the 20-day moving average crossing at 78.76 would confirm that a short-term low has been posted.

 


Disclaimer

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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%):

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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.