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Jim Wyckoff's Morning Report: Markets Mostly Lower

01 May 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, the much-anticipated China official manufacturing purchasing managers’ index came in at 50.4 in April from 50.3 in March, it was reported Thursday. That reading was right in line with market expectations and had little impact on the market place.

After digesting Wednesday afternoon’s FOMC statement from the U.S. Federal Reserve, the “take away” from that report is that the U.S. economy is picking up momentum after a rough winter. That was positive for U.S. equities as the money flows continue to favor stocks over most other competing asset classes, at present.

There is a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the Challenger job cut report, personal income and outlays, the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, and domestic auto industry sales. This data is likely to have at least some impact on many markets Thursday.

The market place is awaiting what is arguably the most important economic report of the month: the April U.S. employment situation report from the Labor Department, on Friday morning. The key non-farm payrolls number is forecast to come in at up around 215,000.

The Russia-Ukraine crisis is still on the radar screen of the world market place. The matter has not de-escalated, but there has been little fresh news coming from that region this week. However, this situation is likely to get worse before it gets any better. Gold and other safe-haven assets will likely at least see selling interest limited due to the instability in Ukraine.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are still elevated.)

(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 higher in early U.S. trading. Bulls are in technical control as prices hover not far below the record high. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 1,882.50 and then at the record high of 1,892.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,866.25 and then at 1,853.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is 3,600.00 and then at last week’s high of 3,613.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,576.50 and then at 3,565.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are slightly lower in early U.S. trading today, but hovering just below the all-time high. Buy stops likely reside just above technical resistance at Wednesday’s high of 16,525 and then at the record high of 16,555. Sell stops likely reside just below technical support at Wednesday’s low of 16,450 and then at 16,420. 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 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 slightly lower early today on profit taking. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 to bearish early today. Shorter-term resistance lies at the overnight high of 135 1/32 and then at the contract high of 135 10/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 134 16/32 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 slightly lower early today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 124.15.5 and then at 124.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 124.08.0 and then at 124.00.0. 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 near steady in early trading. Prices hit a three-week low overnight. 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 79.750 and then at 79.900. Shorter-term support is seen at the overnight low of 79.480 and then at the March low of 79.375. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

June Nymex crude oil prices are lower again in early U.S. trading and hit another three-week low overnight. Bulls are fading quickly. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $99.78 and then at $100.00. Look for sell stops just below technical support at $99.00 and then at $98.50. Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were mostly lower in overnight trading, on more profit taking and a technical pullback from recent good gains. Traders will closely examine this morning’s weekly USDA export sales report. The corn market still sees support from planting delays in the U.S. Corn Belt. Soybean bulls have the solid overall technical advantage amid tight domestic stocks. Wheat bulls also have the chart advantage. A poor U.S. winter wheat crop is bullish for the wheat market, as evidenced by this week’s findings of the hard red winter wheat tour in Kansas. For the next few months weather in the central U.S. will be a major market factor for the grains.

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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