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Jim Wyckoff's Morning Report: Markets Slightly Weaker Overnight

14 July 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It was an uneventful trading affair overnight and to begin the trading week as the concerns about the European Union’s sovereign debt have quickly waned after a flare-up last week.

However, there was more downbeat economic data coming out of the EU Monday as the bloc reported its industrial output was down 1.1% in May from April, but up 0.5% year-on-year. The monthly decline was the largest in almost two years. The figures were in line with market expectations.

The highlight of the trading week is likely to be testimony on U.S. monetary policy from Federal Reserve Chair Janet Yellen before the U.S. Congress on Tuesday and Wednesday.

U.S. corporate earnings reports will also be featured this week.

There is no major U.S. economic data due for release Monday.

Wyckoff’s Daily Risk Rating: 5.0 (The geopolitical scene is quiet and matters such as the Iraqi civil war, the Israeli-Hamas conflict, the Russia-Ukraine tensions and any EU debt concerns are all on the back-burner of the market place…for now.)

(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 firmer in early trading. 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 bullish early today.

Today, shorter-term technical resistance comes in at the record high of 1,978.25 and then at 1,990.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,962.50 and then at 1,950.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today and hovering near the recent 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 to bullish early today. Shorter-term technical resistance is seen at the July high of 3,918.00 and then at 3,925.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,901.00 and then at 3,880.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer in early U.S. trading. Buy stops likely reside just above technical resistance at 16,950 and then at the record high of 16,990. Sell stops likely reside just below technical support at 16,881 and then at 16,850. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are slightly higher early today. Bulls have the firm 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 early today.

Shorter-term resistance lies at last week’s high of 137 23/32 and then at 138 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 6/32 and then at 137 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

September U.S. T-Notes: Prices are near steady in early trading. Bulls have the firm 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 early today. Shorter-term resistance lies at the overnight high of 125.08.0 and then at last week’s high of 125.15.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 125.00.0 and then at 124.29.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly lower in early trading. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.285 and then at last week’s high of 80.405. Shorter-term support is seen at the overnight low of 80.120 and then at 80.000. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

August Nymex crude oil prices are lower in early U.S. trading and hit a two-month low overnight. Bulls have faded badly to suggest a near-term market top is in place. In August Nymex crude, look for buy stops to reside just above resistance at $101.00 and then at $101.50. Look for sell stops just below technical support at $100.00 and then at $99.50. Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed to weaker in overnight trading. Not much new in the grains. Bears are still in firm technical command. Weather in the Corn Belt remains nearly ideal for growing crops. Extended weather forecasts presently still see no excessively dry or hot weather on the horizon. Traders will scrutinize Monday’s USDA export inspections report. The fact that most grain market watcher attitudes are so extremely bearish at present does hint of market bottoms being not far away.

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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