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Jim Wyckoff's Morning Report: Markets Mixed Overnight

31 March 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Monday is the last trading day of the month and of the quarter, which makes it an extra important day from a technical and charts perspective.

In overnight news, the annual inflation rate in the European Union rose by 0.5%, year-on-year, which is the lowest rate since 2009. This reading is well below the 2% annual inflation target set by the European Central Bank. The latest inflation report is another clue the ECB will implement more monetary policy stimulus at some point soon. The ECB holds its monthly monetary policy meeting on Thursday, including a press conference by ECB president Mario Draghi. Market expectations are that the ECB will not change its monetary policy at Thursday’s meeting.

There is a heavy slate of U.S. economic data due out this week, capped by the U.S. jobs report on Friday. U.S. economic data due out Monday includes the Chicago ISM business survey and the Texas manufacturing and business survey.

Russia’s annexation of the Crimea region of Ukraine remains a geopolitical tension, but not quite a front-burner markets issue at this time. U.S. Secretary of State John Kerry met with the Russian foreign minister during the weekend, but little progress was made, reports said.

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

(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 June e-mini 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 bullish early today. Today, shorter-term technical resistance comes in at 1,860.00 and then at last week’s high of 1,868.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,850.00 and then at last week’s low of 1,834.00. 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 still 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 bullish early today. Shorter-term technical resistance is located at Friday’s high of 3,601.00 and then at 3,615.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 3,555.00 and then at last week’s low of 3,536.00. 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 Friday’s high of 16,335 and then at last week’s high of 16,385. Sell stops likely reside just below technical support at 16,250 and then at Friday’s low of 16,195. 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 lower early today on more profit taking after hitting a contract high last Thursday. Bulls still 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 bearish early today. Shorter-term resistance lies at the overnight high of 133 15/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 29/32 and then at 132 21/32. 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. Bears 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. 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 123.14.5 and then at 123.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.06.5 and then at the March low of 123.02.5. 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 lower in early trading, after hitting a four-week high early on. Prices are scoring a bearish “outside day” down on the daily bar chart today.
Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 80.400 and then at today’s high of 80.575. Shorter-term support is seen at the overnight low of 80.150 and then at 80.000. Wyckoff's Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

May Nymex crude oil prices are weaker in early U.S. trading, on a profit-taking pullback after hitting a three-week high on Friday. Bulls still have some upside momentum. In May Nymex crude, look for buy stops to reside just above resistance at the overnight high of $101.73 and then at last week’s high of $102.24. Look for sell stops just below technical support at $101.00 and then at $100.46. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed but mostly weaker overnight on some profit taking and more chart consolidation before Monday morning’s USDA planting intentions report. This is one of the most important USDA reports of the year. Price action could be volatile in the grain futures markets just after the 11:00 a.m. CDT report’s release. 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.

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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