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Jim Wyckoff's Morning Report: China Economic Data 'Downbeat'

10 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - There was more downbeat economic data coming out of China over the weekend.

Its exports fell by 18% in February, year-on-year, it was reported Saturday. A 5% increase in exports from the world’s second-largest economy was expected. China’s trade deficit in February was $23 billion, compared to a $32 billion surplus in January. This surprising news put pressure on Asian and European stock markets, as well as the raw commodity sector, to start the trading week.

The Malaysian airliner that went missing over the weekend is not being credited with significantly moving markets, but the specter of terrorism being at blame is unsettling.

The situation in Ukraine is simmering somewhere in between the front burner and back burner of the market place, at present. Russian president Putin did turn up the heat a bit over the weekend when he said he would back the Crimean region seceding from Ukraine. U.S. and German officials rebuked Putin over the weekend. A vote on the Crimean secession is scheduled for March 16, and that could be the next flashpoint in the region.

U.S. economic data due for release Monday is light and includes the employment trends index.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has de-escalated but has not gone away.)

(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 lower in early U.S. trading today and hovering not far below last week’s record high. The bulls still 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 to bearish early today. Today, shorter-term technical resistance comes in at the record high of 1,891.00 and then at 1,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,868.10 and then at 1,860.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early today and hovering near last week’s 13.5-year high. The shorter-term moving averages (4- 9-and 18-day) are still 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 to bearish early today. Shorter-term technical resistance is located at 3,725.00 and then at last week’s high of 3,740500. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,687.25 and then at 3,675.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.0.

Dow futures: Prices are slightly lower in early U.S. trading and not far below the record high scored in December. Bulls have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at last week’s high of 16,490 and then at the record high of 16,535. Sell stops likely reside just below technical support at Friday’s low of 16,390 and then at 16,330. 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

June U.S. T-Bonds: Prices are slightly lower early today. Bears have downside near-term technical momentum. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 131 15/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 even and then at last week’s low of 130 20/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

June U.S. T-Notes: Prices are near steady early today. Bears still have downside near-term technical momentum. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-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 123.24.0 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 123.10.5 and then at 123.00.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The June U.S. dollar index is firmer early on tepid short covering after hitting a contract low Friday. Prices are in a six-week-old downtrend on the daily bar chart. Bears are still in technical command. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Friday’s high of 80.005 and then at 80.200. Shorter-term support is seen at the overnight low of 79.780 and then at Friday’s contract low of 79.590. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

April Nymex crude oil prices are lower early today. The bulls have faded recently to suggest a market top is in place. In April Nymex crude, look for buy stops to reside just above resistance at $102.00 and then at $102.50. Look for sell stops just below technical support at $101.00 and then at last week’s low of $100.13. Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were lower overnight, partly on profit taking and partly on the downbeat economic data coming out of China that has pressured much of the raw commodity sector to start the trading week. Traders are focusing on Monday morning’s USDA monthly supply and demand report. The grain market bulls still have near-term technical momentum on their side, to suggest prices can work sideways or sideways to higher. Focus will soon turn to the U.S. planting season and any potential planting delays due to cold weather in the central U.S.

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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