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Jim Wyckoff's Morning Report: Markets Mixed Overnight

06 December 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Traders and investors anxiously await what is arguably the most important economic report of the month: Friday morning’s U.S. Labor Department employment report for November.

The key non-farm payrolls figure of that report is seen coming in at up around 180,000 jobs. Given Wednesday’s strong ADP national employment report, in which the jobs figure was up 215,000, many market watchers are expecting a stronger Labor Department employment report. So, the surprise to the market place would be a weaker-than-expected jobs reading—say below 150,000.

So far, this week’s U.S. data economic data has been mostly upbeat and has fallen into the camp that reckons the Fed will act to “taper” its monetary policy sooner rather than later. That has been a bearish weight on the many markets this week, including the stock indexes, U.S. Treasuries and the precious metals.

Other U.S. economic data due for release Friday includes personal income and outlays, consumer installment credit, and the University of Michigan consumer sentiment survey.

Wyckoff’s Daily Risk Rating: 8.0 (Friday marks the biggest U.S. economic report of the month, in which market prices are likely to react significantly to the data.)

(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 futures: Prices are firmer in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below 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 Wednesday’s high of 1,799.30 and then at the record high of 1,812.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,778.00 and then at 1,765.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at this week’s high of 3,501.25 and then at 3,515.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3477.00 and then at this week’s low of 3,453.25. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher early today. Buy stops likely reside just above technical resistance at 15,900 and then at Wednesday’s high of 15,945. Sell stops likely reside just below technical support at 15,817 and then at this week’s low of 15,790. Shorter-term moving averages are neutral early today, as the 4-day moving average is below 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 bearish early today. Wyckoff's Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly higher early today, on tepid short covering after hitting a three-month low on Thursday. The bears have the overall near-term technical advantage as prices are in a choppy, six-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Thursday’s high of 129 13/32 and then at 130 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 128 23/32 and then at the September low of 128 11/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are near steady early today and hit a fresh seven-week low overnight. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at Thursday’s high of 124.23.0 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 124.07.0 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher early today on short covering after hitting a five-week low Thursday. The greenback bears have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.560 and then at 80.675. Shorter-term support is seen at this week’s low of 80.385 and then at 80.000. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

January Nymex crude oil prices are slightly lower early today on mild profit taking after hitting a five-week high Thursday. Price action this week has produced a bullish upside “breakout” on the daily bar chart, to suggest a market low is in place. Bulls have the near-term technical advantage. In January Nymex crude, look for buy stops to reside just above resistance at $97.50 and then at $98.00. Look for sell stops just below technical support at $97.00 and then at $96.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were narrowly mixed overnight, ahead of the key U.S. jobs report. Corn futures bears are still in technical control, and news this week that China has cancelled U.S. corn shipments due to GMO issues is a new bearish weight on the market. Wheat futures bulls have very quickly faded a mid poor weekly export sales data and the bears are back in firm command. Soybean bulls still have the near-term technical advantage. The South American planting and growing season is off to a good start and that is a bearish factor for corn and especially soybeans and is likely to limit the upside in soybeans.

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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