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Jim Wyckoff's Morning Report: Asian, EU Markets Pressured

07 April 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Asian and European stock markets were pressured Monday following Friday’s losses in the U.S. stock market that were led by the Nasdaq index dropping sharply.

Friday’s U.S. jobs data was just a bit weaker than expected, but still put downside pressure on U.S. equities. The U.S. stock indexes were under pressure again in overnight trading.

U.S. economic data due for release Monday is light and includes the employment trends index and consumer installment credit. However, two Federal Reserve officials are also scheduled to speak Monday: St. Louis Fed president James Bullard and Chicago Fed president Charles Evans. Their remarks will be closely scrutinized by traders and investors for clues on the future direction of U.S. monetary policy.

Wyckoff’s Daily Risk Rating: 5.0 (The world geopolitical front remains quieter with no major issues on the front burner of the market place.)

(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 lower and seeing follow-through selling pressure from Friday’s strong losses. A lower close on Monday would confirm a bearish “key reversal” down on the daily bar chart, which would be one technical clue that a market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9- and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,861.75 and then at 1,875.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,840.00 and then at 1,834.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.0

Nasdaq index futures: Prices are lower early today and hit a two-month low overnight. Bulls are fading badly. 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 bearish early today. Shorter-term technical resistance is located at 3,525.00 and then at the overnight high of 3,535.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,500.00 and then at 3,475.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.0.

Dow futures: Prices are lower and seeing follow-through selling pressure from Friday’s strong losses. A lower close on Monday would confirm a bearish “key reversal” down on the daily bar chart, which would be one technical clue that a market top is in place. Buy stops likely reside just above technical resistance at 16,350 and then at 16,400. Sell stops likely reside just below technical support at 16,250 and then at 16,200. Shorter-term moving averages are still bullish early today, as the 4-day moving average is above the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff's Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly higher early today. Bulls have the overall near-term technical advantage and have regained some near-term momentum the past two sessions.
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 to bullish early today. Shorter-term resistance lies at the overnight high of 133 6/32 and then at 133 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 27/32 and then at 132 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 slightly higher early today. Bulls have regained some upside momentum. Shorter-term moving averages (4- 9- 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 123.25.5 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.20.0 and then at 123.16.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The June U.S. dollar index is weaker in early trading and seeing a corrective pullback after hitting a five-week high on Friday. Bulls still some upside momentum, to suggest a market bottom is in place. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.595 and then at last week’s high of 80.770. Shorter-term support is seen at the overnight low of 80.430 and then at Friday’s low of 80.240. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

May Nymex crude oil prices are weaker in early U.S. trading. Bulls have the slight overall near-term technical advantage.
In May Nymex crude, look for buy stops to reside just above resistance at the overnight high of $101.08 and then at $101.63. Look for sell stops just below technical support at Friday’s low of $100.28 and then at $100.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were narrowly mixed in overnight trading. Focus is turning more to U.S. corn planting. Also, Monday marks the first national USDA ratings for the U.S. wheat crop. On Wednesday is the USDA monthly supply and demand report. Monday, traders will also scrutinize the weekly USDA export inspections report. In wheat, the bulls have faded and need to show fresh power soon. Corn and soybean bulls still have the firm technical advantage.

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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