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

News

Jim Wyckoff's Morning Report: Geopolitics Retains Marketplace Hold

Jim Wyckoff's Morning Report: Geopolitics Retains Marketplace Hold

12 August 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - There are still geopolitical hotspots in the world that have the attention of the market place: civil war in Iraq, in which the U.S. has just injected military force; the Russia-Ukraine tensions; and the Israel-Hamas fighting.

While the market place this week appears to be more or less numb to those hotspots, any flare-up will likely jolt traders and investors back into a keener risk-averse posture.

This is the time of year called “the dog days of summer,” which also typically find market participants less interested in trading and more interested in taking their vacations or summer outings before the unofficial end of summer and before school begins. This lackluster trading environment could last until the first week in September.

In overnight news, the German ZEW economic expectations index declined to 8.6 in August from 27.1 in July, for the eighth straight monthly decline. Geopolitical tensions, namely the Russia-Ukraine crisis, have dampened economic growth prospects in Europe the past few months. Economic data coming out of the European Union has been generally downbeat recently.

U.S. economic data due for release Tuesday includes the NFIB index of small business optimism, the weekly Goldman Sachs and Johnson Redbook retail sales reports, and the monthly Treasury budget statement.

Wyckoff’s Daily Risk Rating: 6.0 (The market place early this week is less focused on the still-simmering geopolitical matters: the Russia-Ukraine crisis, Iraq and the Gaza strip.)

(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 as bulls are working to recover after prices hit a 2.5-month low last Friday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at Monday’s high of 1,941.00 and then at 1,950.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,923.25 and then at 1,910.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer in early trading today as bulls work to recover after prices hit a six-week low last Friday. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at Monday’s high of 3,919.00 and then at 3,930.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,900.00 and then at Monday’s low of 3,882.50. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are slightly higher in early U.S. trading, on short covering after hitting a 3.5-month low last Friday. Buy stops likely reside just above technical resistance at Monday’s high of 16,575 and then at 16,600. Sell stops likely reside just below technical support at 16,500 and then at 16,479. Shorter-term moving averages are still bearish early today, as the 4-day moving average is below the 9-day and 18-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 weaker early today and seeing mild profit taking from recent gains that saw prices hit a contract high last Friday. Bulls still have the solid 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 bearish early today. Shorter-term resistance lies at the overnight high of 139 12/32 and then at Monday’s high of 139 19/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 139 even and then at 138 16/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

September U.S. T-Notes: Prices are weaker in early trading, on mild profit taking after hitting a contract high last Friday. Bulls still have the solid 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 125.30.0 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 125.23.5 and then at 125.16.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early trading. Prices are hovering near last week’s nine-month high. Bulls have the firm overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 81.775 and then at 82.000. Shorter-term support is seen at the overnight low of 81.530 and then at Monday’s low of 81.465 Wyckoff's Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

September Nymex crude oil prices are weaker in early U.S. trading. Bears have the overall near-term technical advantage as prices are in a seven-week-old downtrend on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at $98.00 and then at Monday’s high of $98.58. Look for sell stops just below technical support at the overnight low of $97.10 and then at last week’s low of $96.55. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were weaker in overnight trading. Bears remain in full command of the grains. Focus is on this morning’s USDA supply and demand and crop production reports. These reports are not expected to be bullish and are expected to show record U.S. corn and soybean yields. As the summer is winding down, this is one of those rare years where there was not even a slight weather scare during the summer months.

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