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Jim Wyckoff's Morning Report: How is Ukraine Unrest Affecting Markets?

26 February 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The Ukrainian civil unrest and government instability remain a significant geopolitical factor for the market place. Attention has turned from who will lead Ukraine to how will that nation survive, financially.

The Ukrainian currency, the hryvnia, has plunged in value in recent weeks. The Russian ruble has also been pressured significantly by the Ukrainian crisis. The U.S., the European Union and the International Monetary Fund are trying to figure out how to prop up Ukraine’s financial system before it collapses. The situation there remains fluid. The Ukrainian developments and some civil unrest and violence in Thailand recently have prompted increased safe-haven demand for gold.

In overnight news, there was an upbeat German consumer confidence report. However, the European stock markets were under some selling pressure Wednesday.

Traders and investors are looking ahead to Thursday’s speech to the U.S. Senate Banking Committee by Fed Chair Janet Yellen. The speech was originally scheduled for a couple weeks ago, but was postponed due to inclement weather.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales, and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine uncertainty and recent Thailand unrest are keeping some risk aversion in the market place.)

(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 today and hovering near Monday’s record high. The bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-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 all-time high of 1,856.50 and then at 1,865.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 1,837.50 and then at this week’s low of 1,830.00. 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 the 13.5-year high hit on Monday. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at Monday’s high of 3,701.50 and then at 3,715.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 3,668.50 and then at this week’s low of 3,655.00. 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 and hovering near Monday’s five-week high. Bulls have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 16,250 and then at Tuesday’s high of 16,277. Sell stops likely reside just below technical support at 16,187 and then at this week’s low of 16,110. 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. 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 Tuesday’s high of 133 23/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133 even and then at this week’s low of 132 21/32. 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 bearish early today. The 4-day moving average is below 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 Tuesday’s high of 125.28.0 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Tuesday’s low of 125.15.5 and then at last week’s low of 125.08.5. 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 firmer early today. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 80.400 and then at last week’s high of 80.465. Shorter-term support is seen at the overnight low of 80.260 and then at this week’s low of 80.050. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are firmer early today. Bulls still have the overall near-term technical momentum. A steep seven-week-old uptrend is still in place on the daily bar chart. In April Nymex crude, look for buy stops to reside just above resistance at Tuesday’s high of $102.84 and then at this week’s high of $103.45. Look for sell stops just below technical support at the overnight low of $101.58 and then at $101.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed overnight. Grain market bulls have some upside technical momentum. The overall technical posture of the raw commodity sector is turning more bullish by the day, which is supporting fresh speculative buying interest in the commodity sector, including the grain futures. Focus will soon turn from South American crop harvest and yields, to the U.S. planting season and any potential planting delays.

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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