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Jim Wyckoff's Morning Report: Ukraine Situation Remains Concern

27 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The markets are still digesting news late Wednesday that some U.S. and world banks, including Citi, failed a government stress test due to inadequate capital plans.

Those banks will have to resubmit new capital plans to the Federal Reserve. The news, while somewhat surprising, has not rattled the market place.

The Russia-Ukraine tensions have not escalated significantly recently, but the situation remains a concern to the world market place. While the U.S. is leading a worldwide effort to isolate Russia after its annexation of Crimea, reports Thursday said Russian economic growth is set to slow to the weakest rate in years. Foreign capital in Russia has seen a mass exodus since the crisis emerged. Russia’s deteriorating economy and world isolation will very likely only make Russian president Vladimir Putin more defiant on the world stage. Remember that the Russian military is still very powerful and is still bristling with nuclear missiles. Put another way, Russia could become the next North Korea—only supersized. This entire matter is likely to become a longer-term bullish underlying factor for safe-haven gold. Some are now calling the present U.S.-Russia relations “Cold War 2.0.”

Meantime, the IMF has agreed to loan Ukraine up to $18 billion to help out that nation’s struggling economy, after the Russian incursion.

Reports this week say demand for physical gold from Asia continues tepid.

U.S. economic data due out Thursday includes the weekly jobless claims report, the third-quarter GDP estimate, the Kansas City Fed manufacturing survey, and pending home sales.

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, but trading has turned choppy. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-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 1,860.00 and then at Wednesday’s high of 1,868.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,841.50 and then at 1,832.00. 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 but hovering near a six-week low. 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 bearish early today. Shorter-term technical resistance is located at 3,600.00 and then at 3,625.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,570.75 and then at 3,550.00. 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 16,250 and then at 16,300. Sell stops likely reside just below technical support at 16,200 and then at Wednesday’s low of 16,175. 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 near steady early today and hovering near the recent highs. Bulls have the overall level near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 133 27/32 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 134 16/32 and then at 133 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

June U.S. T-Notes: Prices are weaker 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 neutral early today. Shorter-term resistance lies at this week’s high of 123.29.5 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 123.16.0 and then at 123.09.0. 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, on short covering. Bears still have the overall near-term technical advantage. However, a bullish pennant pattern has formed on the daily bar chart. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.315 and then at 80.400. Shorter-term support is seen at the overnight low of 80.100 and then at 80.000. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

May Nymex crude oil prices are higher in early U.S. trading and hit a three-week high overnight. Bulls have upside momentum. In May Nymex crude, look for buy stops to reside just above resistance at $101.50 and then at $102.00. Look for sell stops just below technical support at $100.00 and then at $99.50. Wyckoff's Intra-Day Market Rating: 6.0

GRAINS

Markets were mixed but mostly firmer overnight on some more chart consolidation. Traders will examine this morning’s weekly USDA export sales report. Trading could be quieter today and Friday as next Monday’s USDA planting intentions report comes into view. It’s one of the most important USDA reports of the year. The grain market bulls still have the overall near-term technical advantage. The corn market is seeing underlying support from worries about U.S. planting delays. Soybeans are boosted by strong worldwide demand, and the wheat market sees buying interest due to the poor condition of the U.S. hard red winter crop.

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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