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Jim Wyckoff's Morning Report: Markets Higher Overnight

28 April 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - This is a very busy week of U.S. economic data, highlighted by the latest FOMC meeting of the Federal Reserve on Tuesday and Wednesday, the gross domestic product report on Wednesday and the Labor Department’s jobs report on Friday.

Other key U.S. reports are scattered throughout the week. On Thursday there is also important manufacturing data coming out of China. Markets will likely be impacted by this week’s heavy slate of economic data.

The Russia-Ukraine crisis is still at the forefront of the world market place to start the trading week. The situation did not seriously escalate during the weekend but it did not de-escalate, either, in the eyes of the market place. Pro-Russian separatists took western hostages and paraded them in front of the cameras during the weekend. Russia still has troops near the Ukraine border. The U.S. and European Union are set to slap new sanctions on Russia, beginning Monday. This situation is still a potential geopolitical flashpoint and will likely get worse before it gets better. Gold and other safe-haven assets have and will likely continue to benefit from the instability in Ukraine.

U.S. economic data due for release Monday includes the Chicago Fed midwest manufacturing index, pending home sales and the Texas manufacturing outlook survey.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are still high early this week.)

(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. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Friday’s high of 1,873.75 and then at last week’s high of 1,882.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,853.00 and then at 1,840.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,550.00 and then at 3,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,525.00 and then at last week’s low of 3,516.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are higher in early U.S. trading today. Buy stops likely reside just above technical resistance at 16,400 and then at 16,431. Sell stops likely reside just below technical support at 16,340 and then at 16,300. Shorter-term moving averages are 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 neutral early today. Wyckoff's Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower early today on some profit taking from recent gains. Bulls still have the solid overall 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 neutral early today. Shorter-term resistance lies at the overnight high of 134 30/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 134 18/32 and then at 134 even. 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 to bearish early today. Shorter-term resistance lies at the overnight high of 124.03.0 and then at last week’s high of 124.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Friday’s low of 123.29.5 and then at 123.24.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The June U.S. dollar index is weaker in early trading. The bears have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 79.800 and then at the overnight high of 79.810. Shorter-term support is seen at the overnight low of 79.615 and then at 79.600. Wyckoff's Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

June Nymex crude oil prices are higher in early U.S. trading, on short covering following recent selling pressure. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $101.52 and then at $102.00. Look for sell stops just below technical support at $101.00 and then at the overnight low of $100.49. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were higher in overnight trading. The corn market sees support from planting delays in the U.S. Corn Belt, due to cool, wet weather that is persisting. Soybean bulls have the overall technical advantage. Wheat bulls have rebounded to reclaim the chart advantage. A poor U.S. winter wheat crop is keeping sellers at bay in the wheat market. Traders will closely examine Monday afternoon’s weekly crop progress reports.

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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