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Jim Wyckoff's Morning Report: Risk Aversion Remains Across Markets

Jim Wyckoff's Morning Report: Risk Aversion Remains Across Markets

24 September 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - There is still some risk aversion in the market place Wednesday following this week’s U.S. airstrikes that hit ISIS terrorists at several locations in Iraq and Syria.

World stock markets have seen some selling pressure on the news, but not anything close to a panic. Any escalation in this situation or in other geopolitical hotspots in the world would prompt increased investor anxiety, which would be stock-market bearish, and bullish for safe-haven assets like gold and U.S. Treasury bonds and notes.

In overnight news, Germany’s Ifo business confidence survey came in below expectations, at 104.7 in September versus expectations of a reading of 105.8. The figure was the lowest since April of 2013. The dour German economic data is yet another clue that the European Union’s collective economy is teetering on recession. European Central Bank president Mario Draghi reiterated Wednesday the EU will see very accommodative monetary policy for “a long time.”

The World Bank said Wednesday that Russia will see significantly slower economic growth in the coming months, due to sanctions imposed by other nations. The report said Russia would still likely eke out slight economic growth to just avoid recession the next couple years.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales, and the weekly DOE liquid energy stocks report.

Wyckoff’s Daily Risk Rating: 7.0 (There is still some keener risk aversion amid this week’s U.S. airstrikes against ISIS terrorists in Syria.)

(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. Bulls have faded a bit this week. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below 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 high of 1,988.00 and then at 2,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the September low of 1,968.00 and then at 1,960.00. 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. Bulls are still in overall technical control. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at Tuesday’s high of 4,059.00 and then at 4,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 4,033.75 and then at 4,025.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer in early U.S. trading. Bulls still have the overall near-term technical advantage but have recently faded. Buy stops likely reside just above technical resistance at Tuesday’s high of 17,074 and then at 17,100. Sell stops likely reside just below technical support at Tuesday’s low of 16,955 and then at 16,900. 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 neutral early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at Tuesday’s high of 137 18/32 and then at 138 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 137 even and then at this week’s low of 136 20/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

December U.S. T-Notes: Prices are weaker in early trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 124.19.0 and then at 124.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Tuesday’s low of 124.08.0 and then at this week’s low of 124.01.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly higher in early trading. 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 Monday’s contract high of 84.975 and then at 85.000. Shorter-term support is seen at the overnight low of 84.705 and then at this week’s low of 84.460. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

November Nymex crude oil prices are slightly lower early today. Bears 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 $92.00 and then at $92.50. Look for sell stops just below technical support at $91.00 and then at this week’s low of $90.41. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were slightly higher in overnight trading, on short covering. Bears remain in firm command. Corn, soybeans and wheat prices are still hovering near their recent contract lows. There are still no significant, 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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