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Jim Wyckoff's Morning Report: Markets Lower Overnight

21 January 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The feature of a quieter, U.S. holiday-shortened trading week is the annual economic and financial forum held in Davos, Switzerland.

The forum lasts all week. Many of the world’s economic and financial movers and shakers—or those that think they are—including celebrities, show up at this confab to discuss and promote their ideologies.

There is no major U.S. economic data due out Tuesday, but the IMF world economic outlook is released.

In overnight news, China’s central bank injected liquidity into its financial system to check a rise in short-term interest rates, which was attributed to cash needs for consumers ahead of the Chinese Lunar New Year holiday that begins on January 31.

The German ZEW economic conditions index was released Tuesday and it unexpectedly fell to 61.7 in January from 62.0 in December. The consensus forecast was for a reading of 64.0. The Euro currency was pressured on the German data.

Wyckoff’s Daily Risk Rating: 5.0 (There is no major U.S. economic data out Tuesday, and the world geopolitical front is quiet so far this 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.

--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early U.S. trading and hovering not far below the recent record high. Bulls remain in firm command. 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 early today. Today, shorter-term technical resistance comes in at the record high of 1,846.50 and then at 1,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,830.50 and then at 1,817.50. 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 and trading close to the recent 14-year high. 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 recent high of 3,610.25 and then at 3,625.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,577.50 and then at 3,565.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer in early U.S. trading. Bulls are in technical control. Buy stops likely reside just above technical resistance at 16,500 and then at the record high of 16,535. Sell stops likely reside just below technical support at 16,400 and then at last Friday’s low of 16,340. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-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: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today after hitting a fresh two-month high overnight. The bulls are gaining upside near-term technical momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 131 20/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 27/32 and then at 130 16/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

March U.S. T-Notes: Prices are lower early today. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-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 124.12.0 and then at the overnight high of 124.18.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.00.0 and then at 123.24.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The March U.S. dollar index is higher and hit a fresh nine-week high early today. Bulls have upside near-term technical momentum. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.525 and then at the November high of 81.735. Shorter-term support is seen at the overnight low of 81.265 and then at 81.175. Wyckoff's Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

March Nymex crude oil prices are firmer early today on short covering. Bulls have gained some upside near-term technical momentum recently. Bears do still have the overall near-term technical advantage. In March Nymex crude, look for buy stops to reside just above resistance at Monday’s high of $95.07 and then at $95.50. Look for sell stops just below technical support at $94.50 and then at $94.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed to lower overnight, with soybeans leading on the downside after some beneficial rains and cooler temperatures were reported in Argentina soybean regions overnight. Soybean bulls are fading, technically. Corn bulls are also losing their ground again. Wheat bears remain in full technical command. Export demand for U.S. grains will continue to be a major market factor in the grain markets. Grain market bulls are also worried about the seasonal “February Break” phenomenon that seems to pressure the grain futures markets about this time every year.

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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