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Jim Wyckoff's Morning Report: Market Place Expected to Remain Subdued

27 August 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The market place was again quieter overnight and could remain subdued the rest of this week, ahead of the unofficial end of summer that comes with the approaching U.S. Labor Day holiday weekend.

The feature in the market place this week has been the move to record highs in the major U.S. stock indexes. The major and very mature bull market run in the stock market continues, heading into the historically difficult months for equities: September and October.

European bond yields continued to edge lower Wednesday, with the key German 10-year bund hitting a record low yield of 0.92%. French, Italian and Spanish bond yields also fell to record lows Wednesday. Weak economic data coming out of the European Union this week, combined with the recent dovish comments from European Central Bank president Mario Draghi, suggest quantitative easing of EU monetary policy is coming from the ECB soon. Such has sunk the Euro currency to a 12-month low and boosted European bond market prices.

On the geopolitics front, reports Wednesday said talks between Russia and Ukraine have so far failed to produce any significant results. The ISIS fighters in Iqraq and Syria continue to gain power and that’s also worrisome for the market place.

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is somewhat less focused on the present geopolitical hotspots this week.)

(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.

US STOCK INDEXES

S&P 500 September e-mini futures: Prices are slightly higher in early trading. Prices Tuesday hit a record high. The 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 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 Tuesday’s record high of 2,002.75 and then at 2,015.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,988.75 and then at 1,980.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher in early trading today. Bulls are in solid technical command as prices hover near this week’s 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 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 this week’s high of 4,077.00 and then at 4,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 4,059.50 and then at 4,050.00. 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 and hovering near this week’s record high. Bulls still have upside near-term technical momentum. Buy stops likely reside just above technical resistance at Tuesday’s record high of 17,130 and then at 17,150. Sell stops likely reside just below technical support at Tuesday’s low of 17,070 and then at 17,000. 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: 5.5

US TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are firmer early today and not far below the recent contract high. 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 neutral early today. Shorter-term resistance lies at the overnight high of 139 13/32 and then at this week’s high of 139 21/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 138 31/32 and then at 138 16/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

December U.S. T-Notes: Prices are slightly higher in early trading. 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. 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 125.20.0 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.12.0 and then at this week’s low of 125.05.5. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

US DOLLAR INDEX

The December U.S. dollar index is weaker in early trading and seeing profit taking after hitting a contract high overnight. Bulls still have the solid overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight contract high of 82.855 and then at 83.00.0. Shorter-term support is seen at this week’s low of 82.595 and then at 82.500. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

October Nymex crude oil prices are slightly higher in early U.S. trading, on more tepid short covering. Bears still have the firm overall near-term technical advantage as prices are in a steep two-month-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at $94.50 and then at $95.00. Look for sell stops just below technical support at $93.50 and then at $93.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were narrowly mixed in overnight trading. Not much new in the grains. Bears are in full technical command of the grains and fundamentals are also mostly bearish. Focus now turns to upcoming harvest progress and the demand side of the balance sheet. Harvest of U.S. corn and soybeans begins in earnest in a few weeks.

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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