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Jim Wyckoff's Morning Report: EU Markets Boosted by Positive US Data

24 April 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - European stock markets were supported by upbeat earnings reports coming from the U.S. late Wednesday, namely the technology sector and Facebook and Apple. Asian stock markets were mixed Thursday.

In other overnight news, European Central Bank President Mario Draghi again hinted the ECB could ease monetary policy to ward off deflationary price pressures. The annual inflation rate for the EU is 0.5%, whereas the ECB is aiming for an annual inflation rate of 2.0%.

In a sign the European Union is moving beyond its sovereign debt crisis, a Spain government bonds auction of several maturities fetched record low yields Thursday—ranging from just over 1% to just over 3%. Also, a report Thursday said the EU budget deficit fell below its target level for the first time since the EU debt crisis began in 2008.

The Russia-Ukraine crisis had de-escalated earlier this week. However tensions are rising again after Ukraine accused pro-Russian separatists of torturing Ukraine citizens and shooting at a Ukrainian jet. Russia has warned that any Ukraine military action against pro-Russian separatists would be akin to an attack on Russia. This situation is likely to flare up again, and likely sooner rather than later. Such would likely be bullish for safe-haven assets including the U.S. dollar, U.S. Treasuries and gold.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Kansas City Fed manufacturing survey, and durable goods orders.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are lingering in the background and are not going away.)

(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 and hit a nearly three-week high. Prices are closing in on the record high scored in early April. 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 bullish early today. Today, shorter-term technical resistance comes in at the record high of 1,892.50 and then at 1,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,867.50 and then at 1,860.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are solidly higher early today and hit a nearly three-week high overnight. 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 bullish early today. Shorter-term technical resistance is located at the overnight high of 3,607.25 and then at 3,625.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,589.75 and then at 3,575.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.5.

Dow futures: Prices are higher in early U.S. trading today. Buy stops likely reside just above technical resistance at 16,500 and then at the record high of 16,555. Sell stops likely reside just below technical support at 16,450 and then at Wednesday’s low of 16,415. 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 lower early today on some profit-taking pressure. 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 13/32 and then at this week’s high of 134 30/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 134 even 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: 4.5

June U.S. T-Notes: Prices are weaker 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 neutral early today. Shorter-term resistance lies at the overnight high of 123.29.0 and then at this week’s high of 124.03.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.23.5 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: 4.0

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly lower in early trading. The bears have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 79.945 and then at this week’s high of 80.065. Shorter-term support is seen at the overnight low of 79.810 and then at this week’s low of 79.770. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

June Nymex crude oil prices are firmer in early U.S. trading and seeing a corrective bounce following recent heavy selling pressure. In June Nymex crude, look for buy stops to reside just above resistance at Wednesday’s high of $102.08 and then at $102.50. Look for sell stops just below technical support at Wednesday’s low of $101.20 and then at $101.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were narrowly mixed in overnight trading. Traders will closely examine Thursday morning’s weekly USDA export sales report. The corn market sees selling interest limited by planting delays in the U.S. Corn Belt, due to cool, wet weather. Soybean bulls are fading on profit taking but still have the overall technical advantage. Wheat trading is choppy and the bulls are shaky on the charts. A poor U.S. winter wheat crop is keeping sellers somewhat at bay in the wheat market.

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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