TheCropSite.com- news, features, articles and disease information for the crop industry

News

Jim Wyckoff's Morning Report: Markets Mixed Overnight

21 May 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The economic highlight of the day and arguably of the week is the Wednesday afternoon release of the latest Federal Reserve Open Market Committee (FOMC) minutes.

There are no major changes in monetary policy direction expected to be seen in the minutes. However, as always, analysts will be parsing the wording for clues on future moves by the U.S. central bank. Comments from a couple of Fed officials on Tuesday were deemed by the market place to be in the hawkish camp on U.S. monetary policy.

Recent falling U.S. Treasury bond yields are a concern to the market place, with some wondering if the U.S. is slipping back into economic recession. Bond yields are a powerful indicator of an economy’s health. It could be that the Federal Reserve is behind the curve in realizing any renewed weakness in the U.S. economy. However, this notion is far from being pervasive in the market place. The next couple months of data will go a long way in determining whether the U.S. economy remains on the upswing, or is on the downswing.

In other overnight news, Moody’s Investor Services cut its outlook on China’s property sector from stable to negative. The firm said it expects that sector of the Chinese economy to struggle in the next 12 months.

The Russia-Ukraine territorial crisis has not gone away, but there has been no major, fresh news on that front for a couple weeks. The Ukraine holds a presidential election on Sunday, which could produce new tension in the region. I would not be surprised to see that within the next week or so this situation flares up again to become a front-burner issue in the market place. Such would likely be a bullish development for U.S. Treasuries, the U.S. dollar and gold.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are still somewhat elevated, even though no new developments have occurred the past couple weeks.)

(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 trading. Bulls are still in overall near-term technical control. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in 1,880.00 and then at 1,886.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,866.50 and then at last week’s low of 1,859.00. 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. Bulls have the overall near-term technical advantage. 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 seen at the May high of 3,625.00 and then at 3,650.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,597.25 and then at 3,580.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer in early U.S. trading. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 16,400 and then at 16,450. Sell stops likely reside just below technical support at 16,337 and then at 16,300. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish 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 profit taking. Bulls still have the 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 bearish early today. Shorter-term resistance lies at the overnight high of 137 12/32 and then at this week’s high of 137 25/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 136 23/32 and then at 136 16/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

June U.S. T-Notes: Prices are weaker early today on profit taking. Bulls still have the 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 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 126.00.0 and then at the overnight high of 126.03.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 125.20.0 and then at 125.16.0. 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 near steady in early trading. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 80.170 and then at 80.285. Shorter-term support is seen at this week’s low of 79.935 and then at 79.840. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

July Nymex crude oil prices are higher and hit a fresh contract high in early U.S. trading. Bulls have good upside momentum. In July Nymex crude, look for buy stops to reside just above resistance at $104.00 and then at $105.00. Look for sell stops just below technical support at the overnight low of $102.78 and then at $102.00. Wyckoff's Intra-Day Market Rating: 6.5

GRAINS

Markets were mixed in overnight trading. The corn and wheat markets have declined recently to suggest market tops are in place. Soybeans remain resilient. Weather in the U.S. Corn Belt remains a major market factor. Warmer and mostly drier weather this week favors the bearish camp in corn and soybeans.

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.



Our Sponsors

Partners


Seasonal Picks

Country Dance