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Jim Wyckoff's Morning Report: World Market Place Quieter Thursday

05 June 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The world market place was quieter Thursday as traders and investors awaited the highly anticipated monthly monetary policy meeting of the European Central Bank. It is widely believed the ECB will announce several new monetary policy stimulus measures.

Many believe the ECB refinancing rate will be reduced by around 10 or 15 basis points as well as a reduction in the deposit rate to just below zero, for a slightly negative return. Worries about stagnant European Union economic growth and deflationary price pressures have forced the hand of the central bank.

How the U.S. dollar index and the Euro currency react following Thursday’s ECB meeting and its likely move to stimulate will be key for those two major currencies as well as other markets. Many believe the markets have already factored in such a move by the ECB.

The ECB meeting results Thursday will be quickly digested by the market place as it turns its attention to Friday’s U.S. employment report for May. The key non-farm payrolls figure in the report is forecast to rise by 210,000. However, Wednesday’s ADP national employment report showed a jobs gain figure below 200,000, which could be a clue Friday’s jobs report from the Labor Department will be a miss to the downside on the non-farms number.

The Bank of England left its monetary policy unchanged at its latest meeting that just concluded as of this writing.

U.S. economic data due for release today includes the Challenger job cuts report, the weekly jobless claims report, and ICSC chain store sales trends.

Wyckoff’s Daily Risk Rating: 5.5 (The Russia-Ukraine crisis has not escalated and the rest of the world is quieter regarding geopolitics.)

(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.

U.S. STOCK INDEXES

S&P 500 September e-mini futures: Prices are near steady in early trading and hovering near this week’s record high. Bulls are still in solid overall near-term technical control. 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 neutral early today. Today, shorter-term technical resistance comes in at the record high of 1,919.50 and then at 1,925.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,908.75 and then at 1,900.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early today after hitting a 13-year high on Wednesday. Bulls have the solid 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 Wednesday’s high of 3,751.00 and then at 3,775.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,721.75 and then at this week’s low of 3,710.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.0.

Dow futures: Prices are slightly higher in early U.S. trading and hovering near this week’s record high. Bulls still have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at the record high of 16,745 and then at 16,800. Sell stops likely reside just below technical support at this week’s low of 16,664 and then at 16,640. Shorter-term moving averages are bullish early today, as the 4-day moving average is above 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 neutral early today. Wyckoff's Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are firmer early today on short covering and bargain hunting following recent selling pressure. Bulls still 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 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 Wednesday’s high of 135 23/32 and then at 136 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 6/32 and then at this week’s low of 134 31/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

September U.S. T-Notes: Prices are higher on short covering and bargain hunting. 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 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 124.24.0 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.10.5 and then at this week’s low of 124.06.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly lower in early trading, on mild profit taking but still hovering near a two-month high. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 80.830 and then at 81.000. Shorter-term support is seen at this week’s low of 80.565 and then at 80.480. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

July Nymex crude oil prices are slightly lower in early U.S. trading. Bulls have the overall near-term technical advantage. In July Nymex crude, look for buy stops to reside just above resistance at $103.00 and then at this week’s high of $103.69. Look for sell stops just below technical support at $102.00 and then at $101.50. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed in overnight trading. Traders will closely scrutinize this morning’s weekly USDA export sales report. It’s still my bias that June will be a mostly bearish month for the grains—unless the rain in the Corn Belt diminishes and the temperatures rise, which is not a big stretch. The next major inflection point for the grains could be the U.S. Fourth of July holiday timeframe, which history shows grain prices can reverse trends or accelerate them. Technically, soybean bulls have the near-term advantage. Wheat and corn bears have the near-term technical edge. Focus in the grains will remain in weather patterns in the U.S. midsection.

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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