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Jim Wyckoff's Morning Report: Interests in China Economic Data

23 April 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Key Chinese economic data out Wednesday saw the HSBC April manufacturing PMI come in at 48.3 in March versus 48.0 in April.

A PMI reading below 50.0 suggests contraction in the sector. The market place has been concerned about a slowing pace of China economic growth in recent months—even though China’s economic numbers are the envy of all major industrial countries.

Meantime, the European Union’s flash services PMI for April was 52.5 versus 52.2 in March. The EU’s manufacturing PMI was 53.3 in April versus 53.0 in March.

The Russia-Ukraine crisis had de-escalated early this week. However, at mid-week tensions are rising again after Ukraine accused pro-Russian separatists of torturing Ukraine citizens and shooting at a Ukrainian jet. U.S. Vice President Joe Biden was in Kiev Tuesday for talks with Ukrainian officials. He warned the Russians to back off.

This situation is likely flare up again to a front-burner matter in the market place, and likely sooner rather than later.

Reports Wednesday said demand for physical gold from Chinese consumers is picking up.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the flash manufacturing PMI, new residential sales and the weekly DOE energy stocks report.

Wyckoff’s Daily Risk Rating: 6.5 (The Russia-Ukraine tensions are still at least temporarily mostly 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 slightly lower in early U.S. trading, on a mild corrective pullback from recent good gains. 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 this week’s high of 1,878.75 and then at 1,880.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 1,860.75 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 slightly lower 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 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 this week’s high of 3,590.00 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 3,565.00 and then at Tuesday’s low of 3,548.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are slightly lower in early U.S. trading today, on a mild corrective pullback. Buy stops likely reside just above technical resistance Tuesday’s high of 16,495 and then at the record high of 16,555. Sell stops likely reside just below technical support at Tuesday’s low of 16,395 and then at this week’s low of 16,340.

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: 5.0

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 this week’s high of 134 11/32 and then at 134 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 30/32 and then at this week’s low of 133 14/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

June U.S. T-Notes: Prices are higher early today on short covering. 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 this week’s high of 123.30.5 and then at 124.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.21.0 and then at this week’s low of 123.16.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The June U.S. dollar index is lower in early trading. 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 80.005 and then at this week’s high of 80.065. Shorter-term support is seen at the overnight low of 79.770 and then at 79.620. Wyckoff's Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

June Nymex crude oil prices are lower in early U.S. trading and hit a two-week low on more profit taking. Bulls are quickly fading. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $101.99 and then at $102.50. Look for sell stops just below technical support at the overnight low of $101.20 and then at $101.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were weaker in overnight trading. The corn market bulls made a solid stand on Tuesday, to keep the near-term price uptrend in place. Soybean bulls are fading a bit on profit taking but still have the firm overall technical advantage. Wheat trading is choppy but the bulls are shaky on the charts. U.S. Corn Belt and Plains states weather is the key fundamental factor for the grains at present.

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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