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Jim Wyckoff's Morning Report: Markets Firmer Overnight

23 June 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight world developments, the China HSBC preliminary manufacturing purchasing managers index came in at 50.8 in June versus 49.4 in May.

This is the first time the reading has been above 50.0 this year. A reading above 50.0 suggests expansion. This news is a bullish underlying factor for the raw commodity sector, as China is the world’s largest importer of raw commodities.

Meantime, the European Union’s Markit manufacturing and services PMI came in at 52.8 in June versus 53.5 in May. France was the main weak spot in the report and the reading did not meet market expectations.

The civil war in Iraq remains a market factor. There was more fighting during the weekend that saw a few other Iraqi cities fall to the ISIS rebels. Crude oil prices have rallied recently on worries about Iraqi crude oil exports being reduced, and on concerns the violence in Iraq could spread to other Arab nations.

U.S. economic data due for release Monday includes the Chicago Fed’s national activity index and the U.S. flash manufacturing purchasing managers’ index.

Wyckoff’s Daily Risk Rating: 6.0 (Civil war in Iraq still 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 and poked to another record high overnight. Bulls have the solid 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 early today. Today, shorter-term technical resistance comes in at the overnight record high of 1,959.75 and then at 1,970.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,940.00 and then at 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 lower 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 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 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 3,762.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are slightly lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at Friday’s high of 16,895 and then at the record high of 16,960. Sell stops likely reside just below technical support at 16,800 and then at 16,750. 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 to bullish 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. 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 even with 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 135 26/32 and then at 136 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 11/32 and then at 135 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

September U.S. T-Notes: Prices are firmer in early trading. Bulls have the slight 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 the overnight high of 124.14.5 and then at last week’s high of 124.23.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.07.0 and then at 124.00.0. 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. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Friday’s high of 80.575 and then at 80.800. Shorter-term support is seen at the overnight low of 80.315 and then at last week’s low of 80.240. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

August Nymex crude oil prices are slightly higher and hit another contract high in early U.S. trading. Bulls have the solid overall near-term technical advantage. Prices are in a six-month-old uptrend on the daily bar chart. In August Nymex crude, look for buy stops to reside just above resistance at the contract high of $107.45 and then at $108.00. Look for sell stops just below technical support at $106.50 and then at $106.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were firmer in overnight trading on short covering. Grain market bears are still in overall technical control. The very good growing weather in the U.S. Corn Belt recently is the major bearish fundamental factor in the market. Focus will remain on Corn Belt weather forecasts, but also on upcoming USDA export sales data, and on updated planted acres numbers issued in late June.

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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