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Jim Wyckoff's Morning Report: Russia-Ukraine Tensions Elevated

05 May 2014
Jim Wyckoff Commentary -  TheCropSite

ANALYSIS - The Russia-Ukraine crisis was ratcheted up during the weekend, reports Jim Wyckoff for TheCropSite.

Reports said pro-Russian demonstrators on Sunday stormed a police station in Odessa, Ukraine, to free jailed comrades. This follows clashes on Friday and Saturday in parts of Ukraine that saw dozens of people killed. Gold and U.S. Treasuries are seeing safe-haven buying interest amid the heightened Russia-Ukraine tensions. U.S. stock indexes are weaker in the early going Monday, on some profit taking and amid the moderate “risk-off” trader and investor attitudes early this week.

Asian stock markets saw some selling pressure Monday following downbeat manufacturing data coming out of China, which has the world’s second-largest economy. The HSBC final purchasing managers’ index for China was 48.1 in April versus the preliminary reading of 48.3 and a reading of 48.0 in March. A number below 50.0 suggests contraction in the manufacturing sector.

In other news overnight, the European Union’s producer prices fell for the third month in a row in March—down 0.2% from February and down 1.6% from a year ago. The specter of price deflation is gripping the EU at present, which is likely to prompt the European Central Bank to soon announce some type of further monetary policy stimulus measures. The ECB holds its monthly monetary policy meeting on Thursday.

U.S. economic data due for release Monday includes the U.S. services PMI, the employment trends index, the global manufacturing PMI, and the ISM non-manufacturing report on business.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are 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 weaker in early U.S. trading. Bulls are still in technical control as prices hover not far below the record high. However, there is stiff technical resistance just above present prices. 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,877.25 and then at last week’s high of 1,886.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,880.50 and then at 1,875.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today. 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 3,583.50 and then at last week’s high of 3,605.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,550.00 and then at 3,537.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.0.

Dow futures: Prices are lower in early U.S. trading today. Buy stops likely reside just above technical resistance at 16,419 and then at 16,447. Sell stops likely reside just below technical support at 16,350 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: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are higher early today and hovering at a contract high. Bulls have the solid 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 bullish early today. Shorter-term resistance lies at the overnight contract high of 136 16/32 and then at 136 24/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 136 even and then at 135 24/32. 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. Shorter-term moving averages (4- 9- 18-day) are 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at last week’s high of 124.29.0 and then at the April high of 125.02.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.18.0 and then at 124.10.0. 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 slightly lower in early trading. The bears still 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 last week’s low of 79.480 and then at the March low of 79.375. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

June Nymex crude oil prices are firmer in early U.S. trading on more short covering. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.44 and then at $101.00. Look for sell stops just below technical support at the overnight low of $99.70 and then at $99.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mostly firmer in overnight trading, on some short covering and perceived bargain hunting in corn and soybeans. Soybean bulls have faded badly. Corn bulls are hanging on to their near-term chart advantage and wheat bulls have upside momentum. Focus will be on U.S. corn and soybean planting progress this week. The U.S. wheat crop remains in generally poor shape, which is bullish for that market. Monday evening’s USDA crop progress reports will be closely scrutinized.

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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