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Jim Wyckoff's Morning Report: Markets Mixed Overnight

11 February 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The highlight during US trading hours Tuesday will be Fed Chair Janet Yellen’s inaugural testimony on monetary policy to the Congress.

Traders and investors will closely examine her morning remarks. Yellen is not likely to say anything to rattle the markets (at least that’s her hope) but the fact this is her first speech as Fed chair will draw extra close scrutiny from the market place. Also, some recent weaker-than-expected U.S. economic reports will very likely have some lawmakers asking her if the Fed’s tapering program (announced in December) can continue.

U.S. economic data due for release Tuesday is light again and includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, wholesale trade inventories, and the NFIB small business index.

Wyckoff’s Daily Risk Rating: 6.0 (It’s a quiet start to the trading week, with no major data points on tap early this week. There is a slight chance Yellen’s remarks to Congress could cause some brief market volatility.)

(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 and hit a three-week high overnight. Bulls are regaining upside near-term technical momentum. 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 bullish today. Today, shorter-term technical resistance comes in at the overnight high of 1,804.40 and then at 1,810.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,794.50 and then at this week’s low of 1,786.50. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today and hit a three-week high. Bulls have regained good upside near-term technical momentum. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at the overnight high of 3,596.25 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 3,578.50 and then at 3,565.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer in early U.S. trading, on a corrective bounce after recent selling pressure. Bulls are regaining some upside near-term technical momentum. Buy stops likely reside just above technical resistance at 15,850 and then at 15,900. Sell stops likely reside just below technical support at 15,740 and then at 15,700. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bullish 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 bulls still have the overall near-term technical advantage but have faded a bit recently. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 133 14/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 even and then at 132 28/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

March U.S. T-Notes: Prices are weaker early today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 125.31.5 and then at Monday’s high of 126.03.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.24.0 and then at 125.20.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is weaker early today and hit a two-week low. Bears have gained downside technical momentum just recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.690 and then at Monday’s high of 80.840. Shorter-term support is seen at 80.500 and then at 80.350. Wyckoff's Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

March Nymex crude oil prices are near steady early today after hitting a six-week high above $100.00 a barrel Monday. Bulls still have upside near-term technical momentum. A steep four-week-old uptrend is in place on the daily bar chart. In March Nymex crude, look for buy stops to reside just above resistance at Monday’s high of $100.55 and then at the December high of $100.79. Look for sell stops just below technical support at $99.50 and then at $99.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed overnight. Monday’s monthly USDA supply and demand report was deemed bullish for corn and wheat and neutral for soybeans. Traders have quickly moved beyond that report and are again focusing on demand for U.S. grains. There are still rumors that China will cancel previously booked U.S. soybean purchases, and that’s a bearish factor for soybeans. The grain market bulls still have some upside near-term technical momentum to suggest market bottoms are in place for corn and wheat.

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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