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Jim Wyckoff's Morning Report: Crimea Referendum Has Little Market Impact

17 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - A referendum Sunday saw Crimean citizens overwhelmingly vote on secession from Ukraine and annexation by Russia.

The vote results were not surprising. The Russian parliament said it would move quickly to annex the Crimean region. There was no major violence during or following the referendum—just jawboning from the West on the matter.

Judging from the market place’s somewhat surprising “ho-hum” reaction to the Crimean vote and the situation overall on Monday morning, it appears the matter is fading to a back-burner issue. Any escalation of tensions in Ukraine would quickly put risk-aversion back into the market place. Look for this week to see the U.S. and European Union slap Russia’s hands with diplomatic and economic sanctions.

In other overnight news, the European Union’s inflation rate in February was up 0.3% in February from January, and up 0.7% year-on-year. The figures were below market expectations and raises the specter of further monetary policy stimulus from the European Central Bank, as the rate of EU inflation is well below the ECB’s target of 2.0% per year.

Focus of the market place is turning to this week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC), taking place Tuesday and Wednesday. Fed Chair Janet Yellen will deliver her first press conference after the FOMC meeting’s conclusion Wednesday afternoon. It is expected the FOMC will continue on its “tapering” program, whereby monthly bond purchases are whittled down by $10 billion a month.

U.S. economic data due for release Monday includes the Empire State manufacturing survey, Treasury international capital data, industrial production and capacity utilization, and the NAHB housing market index.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has for the moment de-escalated and has become a tertiary market factor. That could change this week, however.)

(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 higher in early U.S. trading today. The bulls still have the overall near-term technical advantage, but have faded a bit. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 1,850.00 and then at 1,860.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,824.90 and then at 1,815.00. 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. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below 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 Friday’s high of 3,653.50 and then at 3,675.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,630.00 and then at the overnight low of 3,615.50. 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. Buy stops likely reside just above technical resistance at 16,100 and then at 16,150. Sell stops likely reside just below technical support at 16,000 and then at Friday’s low of 15,980. Shorter-term moving averages are neutral early today, as the 4-day moving average is below 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 bearish early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 133 20/32 and then at the March high of 134 1/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 even and then at 132 24/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are lower early today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 124.23.0 and then at Friday’s high of 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.11.0 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly higher in early trading, on short covering in a bear market. Prices are in a six-week-old downtrend on the daily bar chart. Bears are in firm technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Friday’s high of 79.830 and then at last week’s high of 80.060. Shorter-term support is seen at the overnight low of 79.530 and then at Friday’s low of 79.440. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are slightly lower in early U.S. trading. The bears still have the overall near-term technical advantage. In April Nymex crude, look for buy stops to reside just above resistance at $99.00 and then at the overnight high of $99.39. Look for sell stops just below technical support at $98.00 and then at last week’s low of $97.55. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were lower overnight on some profit taking and chart consolidation. The grain market bulls have the overall near-term technical advantage. Focus is on these things, at present: export demand for U.S. grains, the Ukraine unrest, poor U.S. HRW wheat conditions, and the upcoming U.S. planting season and any potential planting delays due to cold weather in the central U.S. These fundamental factors traders are watching are tilting to the bullish camp.

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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