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Jim Wyckoff's Morning Report: Markets Mixed Overnight

09 January 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - With Wednesday’s Federal Reserve’s FOMC minutes out of the way with no major revelations, focus turns to Thursday’s European Central Bank and Bank of England monthly meetings.

Arguably the paramount economic report of the week is Friday’s U.S. jobs report. The key non-farm payrolls figure of the Labor Department’s employment report is expected to show a rise of around 200,000 in December. Any figure that deviates significantly from the consensus forecast is likely to be a markets-mover.

In overnight news, China’s consumer price inflation was reported under control in December, rising at 2.5% year-on-year, and down from a 3% rate in November. This news assuaged some fears that inflationary pressures were heating up in the world’s number-two economy.

In other news from overseas, German industrial output rose by 1.9% in November after falling 1.2% in October, it was reported Thursday. Also, Euro zone consumer confidence rose to a more-than-two-year high in December, according to a report by the European Commission. These reports continue a trend of generally upbeat economic data coming out of the European Union.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cut report and ICSC chain store sales trends.

Wyckoff’s Daily Risk Rating: 6.0 (Today’s ECB meeting and U.S. weekly jobless claims report could be market-sensitive.)

(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 firmer in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today.

Today, shorter-term technical resistance comes in at the record high of 1,846.50 and then at 1,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,829.00 and then at this week’s low of 1,817.50. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below 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 the overnight high of 3,577.00 and then at the December high of 3,594.75. Buy stops likely reside just above those levels.

On the downside, short-term support is seen at the overnight low of 3,556.75 and then at Wednesday’s low of 3,544.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today. Buy stops likely reside just above technical resistance at this week’s high of 16,492 and then at the record high of 16,535. Sell stops likely reside just below technical support at 16,407 and then at this week’s low of 16,340.

Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are firmer early today on short covering in a bear market. The bears still have the solid overall near-term technical advantage as prices are in a 10-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 this week’s high of 129 12/32 and then at 129 19/32.

Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 128 26/32 and then at this week’s low of 128 8/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are firmer early today on short covering in a bear market. Prices still are in a 10-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 123.08.0 and then at 123.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.00.0 and then at this week’s low of 122.30.0. 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 near steady early today after hitting a six-week high overnight. The greenback bulls have gained upside momentum recently. Slow stochastics for the dollar index are neutral early today.

The dollar index finds shorter-term technical resistance at the overnight high of 81.250 and then at Wednesday’s high of 81.335. Shorter-term support is seen at Wednesday’s low of 80.980 and then at 80.755. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

February Nymex crude oil prices are firmer early today and seeing short covering after hitting a five-week low Wednesday. Bears still have the overall near-term technical advantage. In February Nymex crude, look for buy stops to reside just above resistance at $93.50 and then at $94.00. Look for sell stops just below technical support at Wednesday’s low of $92.26 and then at the November low of $92.10. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed but mostly firmer overnight. Traders will closely examine Thursday morning’s weekly USDA export sales report. However, trading is likely to be quieter in the grains as traders are awaiting Friday morning’s USDA quarterly grain stocks report. Technically, corn, soybean and wheat futures bears are in near-term control.

Corn and soybean traders will continue to keep an eye on South American weather, which so far has not been significantly worrisome for the crops. The key “outside markets” have been in a mostly bearish posture for the grains this week, with the U.S. dollar index rallying and crude oil prices selling off.

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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