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Jim Wyckoff's Morning Report: Markets Await Bank Report

Jim Wyckoff's Morning Report: Markets Await Bank Report

04 September 2014
Jim Wyckoff Commentary -  TheCropSite

US - Traders are awaiting this week’s big--and arguably the biggest of the month--economic data points--Thursday’s European Central Bank meeting and Friday’s U.S. jobs report.

The market place reckoned the ECB is on the verge of announcing fresh monetary stimulus. And in fact the ECB did lower interest rates at Thursday’s meeting—to very near zero percent. There was uncertainty on the precise timing of any such move. Some believed the move would come as soon as today. The U.S. jobs report on Friday will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August. Recent improving U.S. economic data suggests the Federal Reserve will continue to wind down its quantitative easing of monetary policy by the end of this year, and will likely begin to raise interest rates sometime in 2015.

The Bank of England also holds its monthly monetary policy meeting Thursday.

There is a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the ADP national employment report, the Challenger job cuts report, revised productivity and costs, the international trade report, the U.S. services PMI, the ICSC chain store sales report, the DOE liquid energy stocks report, and the ISM non-manufacturing report.

On the geopolitical front there have been no major, markets-moving developments this week. The Russia-Ukraine stand-off continues to simmer, with a cease-fire maybe in place, but maybe not. The U.S. and U.K. continue to ratchet up their defensive postures against the ISIS terrorists in the Middle East.

Wyckoff’s Daily Risk Rating: 6.0 (The market place this week is less focused on the tensions between Russia and Ukraine, and on other world hot spots. But I look for that trader and investor antipathy to change, and sooner rather than later.)

(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 hovering near this week’s 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 the record high of 2,002.75, scored on Wednesday, 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 not far below this week’s 14-year high. 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 to bearish early today. Shorter-term technical resistance is seen at this week’s high of 4,105.50 and then at 4,125.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,060.25 and then at 4,050.00. 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 17,140 and then at 17,200. Sell stops likely reside just below technical support at Wednesday’s low of 17,055 and then at 17,000. 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 to bearish early today. Wyckoff's Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today and seeing more profit taking. Bulls have faded a bit this week but 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 bearish early today. Shorter-term resistance lies at 139 even and then at the overnight high of 139 8/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 138 16/32 and then at this week’s low of 138 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

December U.S. T-Notes: Prices are weaker in early trading as the bulls are fading a bit this week. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 125.12.0 and then at 125.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 125.00.0 and then at this week’s low of 124.24.5. 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 firmer in early trading and hovering near this week’s 13-month high. Bulls still 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 this week’s high of 83.190 and then at 83.250. Shorter-term support is seen at this week’s low of 82.900 and then at 82.750. Wyckoff's Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

October Nymex crude oil prices are weaker 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 $96.00 and then at $97.00. Look for sell stops just below technical support at the overnight low of $94.65 and then at $94.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mostly weaker in overnight trading. Grain market bears are in full technical command of the grains at present. Prices Wednesday fell to new contract lows, which negated the basing patterns on the daily charts and suggests a fresh leg down in prices in the near term. U.S. corn and soybean harvest is set to begin, in earnest, the next 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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