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Jim Wyckoff's Morning Report: Asian & EU Markets Quieter

22 April 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, Asian and European stock markets were quieter and traded mixed to mostly firmer amid no major, fresh fundamental news to move prices.

U.S. stock indexes were steady to firmer in early electronic trading Tuesday.

Reports Tuesday said China’s central bank has announced it is reducing its reserve requirement ratio for its rural commercial banks. This move is an easing of monetary policy to try to stimulate the ag sector of the Chinese economy. Major banks in urban areas of China were not included in the move.

Traders and investors are awaiting key Chinese economic data due out Wednesday: the HSBC April manufacturing PMI for China. Recent China economic data has been mostly downbeat by not meeting market expectations.

The Russia-Ukraine crisis has de-escalated early this week. While U.S. and Russia have agreed to work to tamp down this potential geopolitical flashpoint, both sides are once again trading barbs. U.S. Vice President Joe Biden is presently in Kiev for talks with Ukrainian officials. While tensions have temporarily eased regarding this matter, it’s my bias the situation will flare up again, and likely sooner rather than later.

U.S. economic data due for release Tuesday includes the Goldman Sachs and Johnson Redbook weekly retail sales reports, the monthly house price index, existing home sales, and the Richmond Fed business survey.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are now at least temporarily on the back burner 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 near steady in early U.S. trading. Bulls have regained some upside technical momentum recently. 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 1,867.50 and then at 1,880.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,856.50 and then at 1,850.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are higher early today. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-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 3,575.00 and then at 3,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,548.00 and then at 3,525.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are slightly higher in early U.S. trading today. Buy stops likely reside just above technical resistance 16,400 and then at 16,450. Sell stops likely reside just below technical support at Monday’s low of 16,340 and then at 16,300. Shorter-term moving averages are neutral early today, as the 4-day moving average is above 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: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early today. Bulls 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 below the 9-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 134 3/32 and then at Monday’s high of 134 11/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 133 19/32 and then at 133 even. 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. 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 bearish early today. Shorter-term resistance lies at the overnight high of 123.28.5 and then at 124.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 123.18.5 and then at 123.10.0. 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 after hitting a two-week high overnight. The bears 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 the overnight high of 80.065 and then at 80.200. Shorter-term support is seen at Monday’s low of 79.865 and then at 79.750. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

June Nymex crude oil prices are slightly lower in early U.S. trading, on mild profit taking after prices hit a contract high last week. Bulls still have the solid overall near-term technical advantage. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $104.65 and then at the contract high of $104.99. Look for sell stops just below technical support at $103.00 and then at $102.50. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mostly firmer in overnight trading, on short covering and bargain hunting from Monday’s selling pressure.

Corn planting progress made in the U.S. Corn Belt this past week did not meet expectations, and that’s a bit friendly for corn. Some wet weather is also forecast for the Corn Belt this week, which could further delay planting. The weekly crop progress report showed the U.S. wheat crop condition mostly unchanged from last week, but still not in good shape. Technically, wheat bulls have the very slight technical edge but need to show more power soon to keep it. Corn and soybean bulls have the near-term 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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