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Jim Wyckoff's Morning Report: Markets Firmer Overnight

02 December 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It’s a big economic data week. Focus of traders and investors is on the European Central Bank’s monthly monetary policy meeting on Thursday.

On Friday the U.S. jobs report is due out. Wednesday the U.S. Federal Reserve’s beige book is released. 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. Wednesday’s beige book and Friday’s U.S. jobs report will likely provide at least some insight on the timing of the Fed’s next move. 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 this week’s ECB meeting.

U.S. stock indexes are trading near steady Monday morning, with buying interest somewhat limited on early reports the Thanksgiving holiday and weekend Christmas shopping period in the U.S. was the slowest for that period in years.

In overnight news, European stock markets were weaker due in part to some weak manufacturing data coming out of Spain. However, the overall manufacturing data coming out of the European Union showed a rise to 51.6 in November from 51.3 in October. Any reading above 50.0 suggests growth. There was a slightly upbeat report on China’s manufacturing sector released over the weekend.

U.S. economic data due for release Monday includes the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, and the global manufacturing PMI.

Wyckoff’s Daily Risk Rating: 5.0 (A quieter start to the week, but the headline risk from economic data released later this week will see risk aversion increase.)

(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 near steady in early U.S. trading and hovering near last 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 the record high of 1,812.30 and then at 1,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’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: 5.0

Nasdaq index futures: Prices are firmer early today and hit another 13-year high overnight. 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 neutral to bullish early today. Shorter-term technical resistance is located at 3,500.00 and then at 3,515.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,487.25 and then at 3,475.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are near steady early today. Prices Friday hit another record high. Buy stops likely reside just above technical resistance at 16,100 and then at Friday’s high of 16,160. Sell stops likely reside just below technical support at 16,045 and then at 16,000. 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: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today. The bears have the overall near-term technical advantage as prices are in a choppy, five-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 and 18-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 130 18/32 and then at Friday’s high of 130 26/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129 28/32 and then at 129 22/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are lower early today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 125.10.5 and then at Friday’s high of 125.14.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.27.5 and then at 124.18.0. 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 higher early today. The greenback bears still have the overall near-term technical advantage amid recent choppy trading. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.160 and then at 81.300. Shorter-term support is seen at 81.000 and then at last week’s low of 80.675. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly firmer early today on tepid short covering after hitting a five-month low last week. 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 overnight high of $93.31 and then at $94.00. Look for sell stops just below technical support at the overnight low of $92.56 and then at $92.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were mostly firmer overnight. Good domestic and foreign demand for U.S. soybeans is supporting that market.

Corn futures prices continue to drift lower. Wheat futures prices hit a fresh four-week high overnight on short covering. Some better export demand for U.S. wheat has surfaced recently. The technical posture in wheat has improved to the point that I am now confident a market low is in place. The South American planting and growing season for corn and soybeans is now a market factor. So far, weather conditions in South America are mostly favorable, which is a bearish underlying factor.

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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