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Jim Wyckoff's Morning Report: Markets Mainly Lower Overnight

Jim Wyckoff's Morning Report: Markets Mainly Lower Overnight

22 September 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, China’s finance minister said his nation will not offer a more stimulative domestic monetary policy or other economic stimulus measures despite some recent weak economic data coming from the world’s number-two economy.

This news was seen as another bearish clue for the raw commodity sector, including precious metals. There is a key report on manufacturing activity in China due out Tuesday.

There was a Group of 20 industrial nations meeting in Australia during the weekend. The G-20 pledged to continue to work to boost global economic growth. The group said present world economic growth levels are “uneven” and below levels deemed healthy. The group also said the inflation rate in the European Union is “dangerously low.”

On the geopolitical front it has been quieter the past few weeks. That has pushed safe-haven gold prices to a nine-month low, with silver prices hitting a four-year low.

U.S. economic data due for release Monday includes the Chicago Fed national activity index and existing home sales.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is less focused on the tensions between Russia and Ukraine, and on other world hot spots. But it’s my bias this condition will not last and that geopolitics will have a bigger influence on markets in the coming weeks.)

(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 weaker in early trading, on profit taking after hitting a record high on Friday. The 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,003.00 and then at the record high of 2,014.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,991.75 and then at 1,980.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower in early trading today, on profit taking after hitting a 14.5-year high on Friday. Bulls are still in firm technical control. 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 early today. Shorter-term technical resistance is seen at the overnight high of 4,091.00 and then at Friday’s high of 4,116.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,078.00 and then at 4,060.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are weaker in early U.S. trading, on profit taking after hitting a record high last Friday. Buy stops likely reside just above technical resistance at 17,212 and then at Friday’s high of 17,260. Sell stops likely reside just below technical support at Friday’s low of 17,180 and then at 17,150. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bullish early today. Wyckoff's Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are firmer early today, on short covering after hitting and hitting a seven-week low on Friday. 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 bullish early today. Shorter-term resistance lies at 137 even and then at the overnight high of 137 6/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 136 23/32 even and then at 136 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 higher in early trading, on short covering after hitting a seven-week low on Friday. Bulls are fading. 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 bullish early today. Shorter-term resistance lies at the overnight high of 124.09.0 and then at 124.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.01.0 and then at 123.24.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The December U.S. dollar index is near steady in early trading, and hit a contract and 14-month high overnight. Bulls 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 84.930 and then at 85.000. Shorter-term support is seen at the overnight low of 84.645 and then at 84.500. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

November Nymex crude oil prices are near steady early today. Bears still have the overall near-term technical advantage as prices are in a three-month-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at $93.00 and then at $93.50. Look for sell stops just below technical support at the overnight low of $91.80 and then at $91.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed but mostly lower in overnight trading. Corn, soybeans and wheat prices are hovering near their recent contract lows. Bears remain in full technical control and there are still no early technical clues to suggest market bottoms are close at hand. This week will see U.S. corn and soybean harvesting pick up the pace significantly. Focus will shift from the huge U.S. corn and soybean crops, to the demand side of the equation, in the coming 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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