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Jim Wyckoff's Morning Report: Marketplace Quieter in Thanksgiving Lead-up

27 November 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It’s a somewhat quieter market place so far Wednesday, in a pre-holiday trading atmosphere.

The U.S. Thanksgiving holiday is on Thursday. However, it’s a very busy day for U.S. economic data, and that data could move the markets—especially if trading volumes are already thin.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, weekly jobless claims, the Chicago Midwest manufacturing index, the Chicago Fed national activity index, the ISM Chicago business survey, the University of Michigan consumer sentiment index, leading economic indicators, and the weekly DOE liquid energy stocks report.

In Europe Wednesday, the German GfK consumer confidence index rose to its highest level in six years. This continues a recent string of upbeat economic data coming out of the EU.

There was an “incident” earlier this week when U.S. military planes purposely flow over some islands in the East China Sea, which China now claims as its own, but Japan also claims it owns. China had just sent out a dispatch saying those islands were now under its airspace watch. This news may be part of the reason the safe-have gold market got a lift Wednesday. The world is awaiting China’s response to the U.S. military’s move.

Focus of traders and investors is already turning to December, when the European Central Bank and U.S. Federal Reserve hold their next monetary policy meetings. The market place for many weeks has been preoccupied with the precise timing of when the Fed will alter its monetary policy and back off from its monthly bond-buying program—called quantitative easing. Meantime, the ECB has just eased its monetary policy and the market place is wondering what ECB president Mario Draghi will have up his sleeve at the early-December ECB meeting. The European Union is presently battling very low inflation that could turn into dreaded deflation.

Wyckoff’s Daily Risk Rating: 7.0 (While so far it’s a quieter, pre-holiday market place Wednesday, there is a big batch of U.S. economic data released, which could move the markets.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher in early U.S. trading. Prices are hovering near this week’s record high. The 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 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 Monday’s record high of 1,808.80 and then at 1,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,799.00 and then at 1,792.20. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today and hovering near this week’s 13-year high. The 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 bullish early today. Shorter-term technical resistance is located at this week’s high of 3,456.00 and then at 3,475.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,445.75 and then at this week’s low of 3,422.75. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are slightly higher early today and hovering near this week’s record high. Buy stops likely reside just above technical resistance at 16,100 and then at 16,150. Sell stops likely reside just below technical support at 16,000 and then at 15,950. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today. The bears have the overall near-term technical advantage as prices are in a choppy, four-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 131 2/32 and then at this week’s high of 131 9/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 27/32 and then at Tuesday’s low of 130 21/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are weaker early today. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 125.22.5 and then at last week’s high of 125.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.17.5 and then at Tuesday’s low of 125.12.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The March U.S. dollar index is lower early today. The greenback bears have the overall near-term technical advantage amid recent choppy trading. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.89 and then at 81.000. Shorter-term support is seen at the overnight low of 80.675 and then at 80.500. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

January Nymex crude oil prices are lower early today and hit a fresh five-month low overnight. Bears have the overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. In January Nymex crude, look for buy stops to reside just above resistance at the $93.00 and then at the overnight high of $93.60. Look for sell stops just below technical support at $92.00 and then at $91.50. Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were firmer overnight on short covering. The South American planting and growing season for corn and soybeans is now a market factor. So far, weather conditions in South America are favorable, which is a bearish underlying factor for soybeans and to a lesser degree corn. Technically, corn bears are in firm command. Soybean bulls have the near-term technical advantage, and wheat bears remain in full technical control.

TheCropSite News Desk

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.



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