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Jim Wyckoff's Morning Report: Big Week for Economic Reports

Jim Wyckoff's Morning Report: Big Week for Economic Reports

02 September 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - It’s a big week for economic data points, with the highlights being Thursday’s European Central Bank meeting and Friday’s U.S. jobs report.

The market place reckons the ECB is on the verge of announcing fresh monetary stimulus. And the U.S. jobs report will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August.

The OECD reported Monday that inflation in its 34 world member economies fell again, at 1.9% in July from 2.1% in June, year-on-year. The OECD said the slowing inflation rate reflects continued weak overall world economic growth. The report is yet another worrisome clue that deflationary price pressures are lurking in the entire world economic system. Such is a bearish factor that has contributed to the present downward trend in the raw commodity sector.

On the geopolitical front, there were no major weekend developments in the Ukraine-Russia confrontation, in the eyes of the market place. The European Union is ratcheting up its sanctions on Russia this week. The markets showed very little reaction to news the U.S. launched air strikes against terrorists in Somali during the weekend.

There is a hefty slate of U.S. economic data due out Tuesday, including the U.S. manufacturing PMI, construction spending, the IBD/TIPP economic optimism index, the ISM manufacturing report, and the global manufacturing PMI.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is still somewhat focused on the tensions between Russia and Ukraine but the situation has not changed much, in the eyes of the market place.)

(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 December e-mini futures: Prices are firmer in early trading and hit another new high overnight. 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 to bullish early today. Today, shorter-term technical resistance comes in at 2,000.00 and then at 2,015.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,989.25 and then at last week’s low of 1,979.50. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are firmer in early trading today and hit another 14-year high overnight. Bulls are in firm technical command. 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 the overnight high of 4,089.25 and then at 4,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,079.00 and then at 4,065.00. 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 and hovering not far below last week’s record high. Buy stops likely reside just above technical resistance at the record high of 17,130 and then at 17,150. Sell stops likely reside just below technical support at 17,075 and then at 17,050. Shorter-term moving averages are still 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: 6.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are lower early today and seeing profit taking after hitting a contract high last week. 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 bearish early today. Shorter-term resistance lies at 139 16/32 and then at 140 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 139 5/32 and then at 138 28/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are lower in early trading. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 125.20.0 and then at the overnight high of 125.24.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.13.0 and then at 125.08.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher in early trading and hit a 13-month high overnight. 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 the overnight high of 83.135 and then at 83.250. Shorter-term support is seen at the overnight low of 82.900 and then at 82.750. Wyckoff's Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

October Nymex crude oil prices are lower in early U.S. trading. Bears still have the overall near-term technical advantage as prices are in a nine-week-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at last week’s high of $96.00 and then at $96.50. Look for sell stops just below technical support at Friday’s low of $94.48 and then at $94.00. Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were slightly higher in overnight trading, on short covering. The grain markets could be “basing” at lower price levels on the daily charts, as price action the past few weeks has been mostly choppy and sideways. Such is indicative of a bottoming process in a market. However, grain market bears are in technical command of the grains at present. U.S. corn and soybean harvest is set to begin, in earnest, the next few weeks. The very wet weather in parts of the Corn Belt that had benefited the crops could start to hamper harvest progress, if the wet-weather pattern continues.

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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