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Jim Wyckoff's Morning Report: German Production Shows Decline

09 December 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news from the European Union, German industrial production showed a surprising decline of 1.2% in October from September. This was well short of market place expectations of a rise of 0.8%. Greeceā€™s GDP contracted by 3.0% in the third quarter, on an annualized basis.

After six years of contraction, Greece’s GDP is forecast to rise just a bit in 2014. In Asia, stock markets there were supported by a rise in China’s trade surplus to a nearly five-year high. The OECD reported overnight that it expects economic growth worldwide to pick up the pace just slightly in 2014.

Traders and investors are already looking forward to next week’s meeting (Dec. 17-18) of the Federal Reserve’s Open Market Committee (FOMC). Recent upbeat U.S. economic data, including a stronger-than-expected U.S. jobs report on Friday, suggests the Fed might move up its timeline for implementing a tapering of its monthly bond-buying program, also called quantitative easing, including some who think the Fed will announce a tapering at next week’s FOMC meeting.

U.S. economic data due for release Monday is light and includes the employment trends index.

Wyckoff’s Daily Risk Rating: 5.0 (There is not much in the way of important worldwide economic data due out until next week’s FOMC meeting. Thus, trading activity is likely to be more subdued until the middle of next week.)

(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.

US Stock Indexes

S&P 500 futures: Prices are near steady in early U.S. trading and hovering not far below the recent record high. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the record high of 1,812.30 and then at 1,825.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,790.00 and then at last week’s low of 1,778.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are higher early today and hit another 13-year high overnight. 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 to bullish early today. Shorter-term technical resistance is located at the overnight high of 3,513.75 and then at 3,525.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,500.00 and then at Friday’s low of 3,477.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are near steady early today. Buy stops likely reside just above technical resistance at 16,050 and then at 16,100. Sell stops likely reside just below technical support at 16,000 and then at 15,950. 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 neutral early today. Wyckoff's Intra-Day Market Rating: 5.0

US Treasury Bonds and Notes

March U.S. T-Bonds: Prices are higher early today, on short covering after hitting a contract low on Friday. The bears have the overall near-term technical advantage as prices are in a seven-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 the overnight high of 129 17/32 and then at 130 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129 2/32 and then at 128 23/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

March U.S. T-Notes: Prices are higher early today, on short covering after hitting an 11-week low 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 the overnight high of 124.18.5 and then at 124.23.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.06.5 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

US Dollar Index

The March U.S. dollar index is slightly lower early today and hit a six-week low overnight. 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 80.490 and then at 80.675. Shorter-term support is seen at the overnight low of 80.335 and then at 80.000. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

January Nymex crude oil prices near steady early today. Prices Friday hit a six-week high. Bulls have the near-term technical advantage. In January Nymex crude, look for buy stops to reside just above resistance at last week’s high of $98.07 and then at $98.50. Look for sell stops just below technical support at $97.00 and then at $96.50. Wyckoff's Intra-Day Market Rating: 5.5

Grains

Markets were mixed overnight. Cold, snow and ice that is gripping U.S. wheat regions is a bullish fundamental factor as it could produce winter kill of the wheat crop. However, growing weather in South American corn and soybean regions remains mostly favorable, and that’s a negative for soybeans and to a lesser degree corn. Corn and wheat futures bears are still in technical control. Soybean bulls still have the near-term technical advantage.

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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