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Jim Wyckoff's Morning Report: Will Hong Kong Protests Affect Markets?

Jim Wyckoff's Morning Report: Will Hong Kong Protests Affect Markets?

29 September 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - China is celebrating a week-long national holiday this week, which could make for quieter trading in many markets. The market place is also keeping a wary eye on a big pro-democracy demonstration presently occurring in Hong Kong.

There was another downbeat economic report coming out of the European Union Monday. The EU’s Economic Sentiment Indicator fell to 99.9 in September from 100.6 in August, for the lowest reading of the year. That news helped to pressure the beleaguered Euro currency.

The U.S. dollar hit a six-year high against the Japanese Yen and a 22-month high against the Euro Monday. Ideas the U.S. Federal Reserve will begin to tighten its monetary policy, while other major central banks do the opposite, have boosted the dollar and pressured the Euro currency and other major currencies. The appreciation of the greenback on the foreign exchange market has been a bearish weight on the raw commodity sector, as most major raw commodities are priced in U.S. dollars on the world market.

U.S. economic data due for release Monday includes personal income and outlays, pending home sales, and the Texas manufacturing outlook survey. The big economic data points of the week come with Thursday’s monthly meeting of the European Central Bank and the U.S. employment report on Friday.

Wyckoff’s Daily Risk Rating: 6.0 (Risk aversion early this week is not a front-burner markets issue, but there remain geopolitical developments that could flare up in a hurry.)

(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 lower in early trading. Bulls have faded recently. 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,977.00 and then at 1,992.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,956.50 and then at 1,950.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.0

Nasdaq index futures: Prices are lower in early trading today. Bulls have faded a bit recently. 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 bearish early today. Shorter-term technical resistance is seen at the overnight high of 4,050.00 and then at 4,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 4,025.00 and then at last week’s low of 4,000.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.0.

Dow futures: Prices are lower in early U.S. trading. Bulls are fading. Buy stops likely reside just above technical resistance at 17,000 and then at 17,030. Sell stops likely reside just below technical support at 16,900 and then at last week’s low of 16,870. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff's Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are firmer early today and are hovering near a three-week high. Bulls have some upside momentum. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 last week’s high of 138 7/32 and then at 138 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 18/32 and then at 137 5/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

December U.S. T-Notes: Prices are firmer 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 and 18-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 last week’s high of 124.29.5 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 124.16.0 and then at the overnight low of 124.12.5. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The December U.S. dollar index is near steady in early trading and hit another contract and four-year high overnight. Bulls have the strong 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 85.930 and then at 86.000. Shorter-term support is seen at 85.500 and then at 85.235. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

November Nymex crude oil prices are weaker 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. However, the recent choppy trading hints at a near-term market low being in place. Look for buy stops to reside just above technical resistance at last week’s high of $93.86 and then at $94.00. Look for sell stops just below technical support at the overnight low of $92.75 and then at $92.23. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were narrowly mixed in overnight trading. It was a dry and warm weekend in the U.S. Corn Belt, so combines will be rolling early this week as harvest is soon to hit full stride. However, there is rain in the forecast for mid-week.

Markets are not far below last week’s contract lows and bears are in command. There are still no early technical clues to suggest market bottoms are close at hand. A look at the longer-term weekly and monthly charts for the grains shows prices can still fall significantly farther before nearing historically significant support levels.

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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