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Jim Wyckoff's Morning Report: Focus of Market on FOMC Meeting

19 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Focus of the market place is on the U.S. Federal Reserve’s Open Market Committee (FOMC) meeting that ends Wednesday afternoon with a statement.

Fed Chair Janet Yellen will then deliver her first press conference. It is expected the FOMC will continue on its “tapering” program, whereby monthly bond purchases are whittled down by $10 billion a month. Recent U.S. economic data has been a mixed bag, which is making it tougher for the market place to read what the Fed’s intentions might be. There could be some markets volatility following the FOMC statement and during Yellen’s press conference.

There are rumors floating around Wednesday that another Chinese corporation is in default on an interest rate payment on its bonds. However, there has been no confirmation of such by China. Still, traders and investors are wondering if “where there’s smoke, there’s fire.” A few weeks ago the first corporate bond default occurred in China.

The Crimea region of Ukraine annexed by Russia has not been met by major violence in the Ukraine, at least not yet. Also, the threatened U.S. and European Union sanctions have so far not been as tough as some expected. These developments have assuaged the market place so far. U.S. and world stock markets have rallied this week in the wake of that situation. Russian President Vladimir Putin on Tuesday confirmed his country will annex Crimea.

The gold market sold off and stock indexes rallied Tuesday when Putin said Russia will not seek to annex other regions of Asia. Many doubt Putin’s word on the matter. Still, this geopolitical incident has died down from a market place perspective, and that’s been bearish for safe-haven gold. But the Russia-Ukraine situation is still far from stable. Any escalation of tensions in Ukraine or further incursions into Ukraine from Russia would quickly put keen risk-aversion right back into the market place.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE energy stocks report and the FOMC statement.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has for the moment de-escalated and has become a tertiary market factor.)

(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.

US Stock Indexes

S&P 500 futures: Prices are near steady in early U.S. trading today. The bulls still have the overall near-term technical advantage. 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 to bullish early today. Today, shorter-term technical resistance comes in at 1,874.50 and then at the record high of 1,891.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 1,846.20 and then at 1,832.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are firmer early today. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is located at 3,721.25 and then at the March high of 3,740.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,694.50 and then at 3,675.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are slightly higher in early U.S. trading. Buy stops likely reside just above technical resistance at Tuesday’s high of 16,300 and then at 16,350. Sell stops likely reside just below technical support at 16,250 and then at Tuesday’s low of 16,195. 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 bullish early today. Wyckoff's Intra-Day Market Rating: 5.5

US Treasury Bonds and Notes

June U.S. T-Bonds: Prices are firmer early today. Bulls have the overall near-term technical advantage. 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 8/32 and then at this week’s high of 133 20/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 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: 5.5

June U.S. T-Notes: Prices are near steady early today. Bulls have the overall near-term technical advantage. 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 124.19.0 and then at this week’s high of 124.23.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 124.08.0 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

US Dollar Index

The June U.S. dollar index is slightly higher in early trading, on tepid short covering in a bear market. Prices are in a six-week-old downtrend on the daily bar chart. Bears are still in firm technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 79.690 and then at 79.830. Shorter-term support is seen at the contract low of 79.375 and then at 79.250. Wyckoff's Intra Day Market Rating: 5.0

NYMEX Crude Oil

April Nymex crude oil prices are near steady in early U.S. trading. The bears still have the overall near-term technical advantage, but the bulls gained a bit of upside momentum with Tuesday’s solid gains. In April Nymex crude, look for buy stops to reside just above resistance at $100.00 and then at $100.33. Look for sell stops just below technical support at $99.00 and then at $98.50. Wyckoff's Intra-Day Market Rating: 5.0

Grains

Markets were mixed overnight—corn and wheat weaker and soybeans higher. The grain market bulls still have the overall near-term technical advantage. Traders are focusing on export demand and the upcoming U.S. planting season. The March 31 USDA planting intentions report is also coming into view. It’s one of the most important USDA reports of the year.

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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