TheCropSite.com- news, features, articles and disease information for the crop industry

News

Jim Wyckoff's Morning Report: Markets Mixed Overnight

20 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The market place is still digesting the statement of the latest U.S. Federal Reserve Open Market Committee (FOMC) meeting that ended Wednesday afternoon, and Fed Chair Janet Yellen’s press conference afterward.

As expected, the FOMC will continue on its “tapering” program, whereby monthly bond purchases are whittled down by $10 billion a month. What rattled some markets was an indication the Fed could begin to raise U.S. interest rates sooner than many expect—sometime in 2015. Yellen is perceived to be fully in the dovish camp on monetary policy, and several markets were caught off guard by the statement and her remarks that were deemed less-than-fully-dovish.

The U.S. dollar index has surged following the FOMC developments, which in turn has been a bearish underlying factor for commodity markets, including gold. U.S. Treasury market prices have also slumped (yields rising).

Asian and European stock markets sold off Thursday, following the lead of U.S. stock indexes Wednesday, in the wake of the FOMC statement and Yellen press conference.

The Ukraine-Russia matter has moved from an international crisis to a regional squabble, from the perspective of the market place. German President Angela Merkel on Thursday called the Group of Eight (G-8) nations defunct—basically kicking Russia out of the club of the eight most economically powerful nations in the world. Any significant escalation of tensions between Ukraine and Russia would quickly put keen risk-aversion back into the market place.

U.S. economic data due for release Thursday includes the weekly jobless claims report, existing home sales, leading economic indicators, and the Philadelphia Fed business survey.

Wyckoff’s Daily Risk Rating: 5.0 (The Ukraine situation has for the moment de-escalated and has become a non-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.

--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker 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 bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight high of 1,853.70 and then at this week’s high of 1,867.20. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,842.20 and then at 1,832.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker 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 early today. Shorter-term technical resistance is located at the overnight high of 3,675.50 and then at this week’s high of 3,704.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,650.00 and then at 3,640.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.0.

Dow futures: Prices are weaker in early U.S. trading. Buy stops likely reside just above technical resistance at 16,139 and then at 16,200. Sell stops likely reside just below technical support at Wednesday’s low of 16,045 and then at 16,000. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-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: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly higher early today on a corrective bounce from solid losses posted Wednesday. Bulls have the slight overall near-term technical advantage but are fading. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 132 20/32 and then at 133 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131 26/32 and then at 131 16/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

June U.S. T-Notes: Prices are weaker early today. Bulls faded badly Wednesday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day.

The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 123.19.0 and then at 123.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.09.5 and then at this week’s low of 123.05.0. 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 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 weaker 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 this week’s solid gains. In April Nymex crude, look for buy stops to reside just above resistance at $100.33 and then at the overnight high of $100.82. Look for sell stops just below technical support at $99.00 and then at $98.50. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed overnight—corn and wheat weaker and soybeans slightly higher. The grain market bulls still have the overall near-term technical advantage. Traders will closely examine this morning’s weekly USDA export sales report. The rally in the U.S. dollar index the past 24 hours is a bearish underlying factor for the grains. The March 31 USDA planting intentions report is 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.



Our Sponsors

Partners


Seasonal Picks

Country Dance