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Jim Wyckoff's Morning Report: Markets Mixed Overnight

15 January 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - A better-than-expected reading on monthly U.S. retail sales reported on Tuesday helped to sink the gold and silver markets and boost the U.S. stock market.

That data helped to mitigate last Friday’s weaker-than-expected U.S. employment report that called into question the pace of the Fed’s newly announced tapering of its monthly bond-buying program, also called quantitative easing. Traders and investors will continue to very closely scrutinize U.S. economic reports after last Friday’s surprising jobs report.

There is another solid slate of U.S. economic data due out Wednesday, including the weekly MBA mortgage applications survey, the producer price index, the Empire State manufacturing survey, the weekly DOE energy stocks report, and the Federal Reserve’s beige book.

In overnight news, the European stock market hit a six-year high, following the lead of solid gains in U.S. stock indexes on Tuesday. The gains in European equities came despite a downbeat German GDP report, showing annual growth of only 0.4% in 2013. Generally, Euro zone economic data has been upbeat in recent weeks.

Asian stock markets also closed higher Wednesday, following the lead of the U.S.

Wyckoff’s Daily Risk Rating: 6.0 (There is a decent slate of U.S. economic data Wednesday, which could move 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 firmer again in early U.S. trading. Bulls are in overall technical command. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at this week’s high of 1,838.30 and then at the record high of 1,846.50.

Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,831.70 and then at 1,817.50. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are higher early today as bulls are in command. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day.

The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the December high of 3,594.75 and then at 3,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,570.75 and then at 3,550.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher in early U.S. trading. Bulls are in technical control. Buy stops likely reside just above technical resistance at 16,390 and then at this week’s high of 16,415. Sell stops likely reside just below technical support at 16,300 and then at 16,250.

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 neutral early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today. The bulls have gained some upside momentum recently, but need to show fresh power soon to keep it. 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 neutral early today.

Shorter-term resistance lies at the overnight high of 130 24/32 and then at 131 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 17/32 and then at 130 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are near steady early today. Bulls faded Tuesday. 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 neutral to bearish early today.

Shorter-term resistance lies at the overnight high of 124.07.5 and then at 124.12.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.02.5 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is higher early today and seeing some short covering. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.075 and then at last week’s high of 81.335. Shorter-term support is seen at the overnight low of 80.750 and then at this week’s low of 80.540. Wyckoff's Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

February Nymex crude oil prices are firmer early today on more short covering after hitting a 6.5-month low last week. Bears still have the overall near-term technical advantage. In February Nymex crude, look for buy stops to reside just above resistance at $93.38 and then at $94.00. Look for sell stops just below technical support at the overnight low of $92.43 and then at $92.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were again narrowly mixed overnight. Soybean bulls have regained some upside technical momentum this week. Corn bulls are holding their ground but need to show fresh power soon. Corn and soybean traders continue to keep an eye on South American weather, which is now heating up a bit and may become a bullish market factor in the coming days. Focus of grain traders is also on export demand for U.S. grains.

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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