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

News

Jim Wyckoff's Report: Will China Use Monetary Stimulus to Boost Economy?

24 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, the China HSBC preliminary purchasing managers’ index dropped to an eight-month low of 48.1 in March from 48.5 in February.

This continues a trend of weaker-than-expected economic data coming out of China and raises the question: Will China move to use monetary stimulus to boost its economy?

Meantime, the European Union’s March manufacturing flash PMI came in at 53.2 versus expectations of a 53.3 reading and a February figure of 53.3. A PMI reading below 50.0 suggests contraction and above 50.0 suggests growth.

European stock markets were pressured in part on the China PMI news. However, Asian stock markets appeared little affected on the weaker China data and showed gains. European stock markets are still unnerved by Russia’s annexation of the Crimea region of Ukraine last week.

The Ukraine-Russia conflict is still on the radar screen of the market place. Russian troops over-ran Ukrainian military bases during the weekend. President Obama is in Europe and China this week drumming up international support for more sanctions on Russia.

A Group of Seven meeting is scheduled to take place Monday on the Russia-Ukraine matter. Any significant escalation of tensions between Ukraine and Russia would quickly put keener risk-aversion into the market place and would likely benefit safe-haven gold.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and the U.S. flash manufacturing purchasing managers’ index.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has for the moment de-escalated but is still an unsettling 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.

--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early U.S. trading today. The bulls 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 above the 9-day and 18-day. The 9-day is below 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 last week’s high of 1,876.50 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 the overnight low of 1,852.00 and then at 1,842.00. 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 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 3,654.50 and then at 3,675.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at last week’s low of 3,633.75 and then at 3,615.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer in early U.S. trading. Buy stops likely reside just above technical resistance at 16,300 and then at 16,350. Sell stops likely reside just below technical support at 16,200 and then at 16,150. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below 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

June U.S. T-Bonds: Prices are weaker early today. Bulls and bears are on an overall level near-term technical playing field. 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 early today. Shorter-term resistance lies at the overnight high of 132 28/32 and then at 133 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132 even and then at last week’s low of 131 24/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

June U.S. T-Notes: Prices are lower early today. Bears have the overall near-term technical advantage. 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 123.15.0 and then at 123.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.05.0 and then at 123.00.0. 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 firmer in early trading. Bulls still have some upside near-term technical momentum on their side. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.450 and then at last week’s high of 80.505. Shorter-term support is seen at the overnight low of 80.1950 and then at 80.000. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

May Nymex crude oil prices are firmer in early U.S. trading. The bulls have some upside technical momentum on their side.
In May Nymex crude, look for buy stops to reside just above resistance at last week’s high of $100.25 and then at $101.00. Look for sell stops just below technical support at $99.00 and then at $98.25. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were higher overnight. The grain market bulls have the overall near-term technical advantage. Focus remains on U.S. exports, which have been generally strong recently. This morning’s weekly USDA export inspections report will be closely scrutinized by grain traders. 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