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Jim Wyckoff's Morning Report: Markets Firmer Overnight

19 June 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Traders and investors are still digesting Wednesday afternoon’s Federal Open Market Committee meeting statement and a press conference from Fed Chair Janet Yellen.

Most market watchers expected the FOMC announcement that it would continue to taper its monthly bond-buying program, also called quantitative easing, by another $10 billion. Markets took the FOMC statement in stride, but Yellen’s comments at her press conference rallied stock and bond markets. While not surprising, Yellen reassured the market place that U.S. interest rates are not going to be raised any time soon. There were a few market watchers who were wondering if Yellen might sound just a bit more hawkish on U.S. monetary policy after a surprisingly hot reading for the May U.S. consumer price index that was released earlier this week.

The civil war in Iraq remains a major market factor and continues to prompt some risk aversion among traders and investors. The U.S. said it is mulling its military options on the matter. Crude oil prices are at multi-month highs on worries about Iraqi crude oil exports being reduced, and on concerns the violence in Iraq could spread to other Arab nations.

The U.S. dollar index is posting solid losses Thursday morning in the wake of the dovishly construed comments from Yellen. Gold prices are higher on some safe-haven demand due to geopolitical tensions and on the weaker greenback.

U.S. economic data due for release Thursday includes the weekly jobless claims report, leading economic indicators and the Philadelphia Fed business survey.

Wyckoff’s Daily Risk Rating: 6.5 (Violence and civil war in Iraq has the world market place concerned.)

(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 September e-mini futures: Prices are near steady in early trading but did poke to another record high overnight. Bulls still have the overall near-term technical advantage. 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight record high of 1,951.25 and then at 1,960.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,940.00 and then at Wednesday’s low of 1,929.25. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today. Bulls have the overall near-term technical advantage as prices hover near a 14-year high. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at last week’s high of 3,805.00 and then at 3,825.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,775.00 and then at Wednesday’s low of 3,762.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are near steady in early U.S. trading. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at Wednesday’s high of 16,835 and then at 16,900. Sell stops likely reside just below technical support at 16,800 and then at 16,750. 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 neutral early today. Wyckoff's Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are higher early today. 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 136 11/32 and then at 136 19/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 26/32 and then at 135 16/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

September U.S. T-Notes: Prices are solidly higher in early trading and hit a two-week high overnight. Bulls have the near-term technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 124.21.5 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.15.0 and then at 124.08.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.5

U.S. DOLLAR INDEX

The September U.S. dollar index is solidly lower and hit a four-week low in early trading. Bulls have lost their near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.520 and then at 80.800. Shorter-term support is seen at the overnight low of 80.240 and then at 80.000. Wyckoff's Intra Day Market Rating: 3.5

NYMEX CRUDE OIL

July Nymex crude oil prices are firmer and hovering not far below last week’s contract high in early U.S. trading. A bullish pennant pattern has formed on the daily bar chart.
Bulls have the solid overall near-term technical advantage. Prices are in a five-month-old uptrend on the daily bar chart. In July Nymex crude, look for buy stops to reside just above resistance at $107.00 and then at the contract high of $107.68. Look for sell stops just below technical support at the $106.00 and then at $105.50. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mostly firmer in overnight trading on more short covering following recent selling pressure. Grain market bears are still in control, overall. The very good growing weather in the U.S. Corn Belt and more of the same in the extended forecast has the grain market bears very comfortable at present. Remember, however, that gain markets can “turn on a dime” when summertime weather forecasts change. Stay tuned.

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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