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Jim Wyckoff's Morning Report: Markets Mixed Overnight

10 February 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Asian and European stock markets were firmer Monday, to start the new trading week. U.S. stock indexes were a bit weaker in overnight trading.

The world stock markets have for the moment stabilized following the recent turmoil in some of the world’s emerging currency markets. China’s markets and businesses are back in play after their week-long hiatus due to the Chinese Lunar New Year holiday.

The market place is still digesting Friday’s weaker-than-expected U.S. employment report for January, which calls into question how much more the Federal Reserve will be able to taper its monthly bond-buying program, also called quantitative easing. Friday’s U.S. jobs report follows a downbeat jobs report in December, as well as a few other U.S. economic data points that have been disappointing the past few weeks.

A theme appears to be developing so far during 2014: This year will see higher daily price volatility in many markets than what was seen last year.

In other news, a report out of China Monday said that country produced and consumed record amounts of gold in 2013. China is the largest gold producer and is vying with India for the top consumer worldwide.

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

Wyckoff’s Daily Risk Rating: 5.0 (It’s a quiet start to the new trading week, with no major data points on tap early 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 weaker in early U.S. trading, on a corrective pullback from recent good gains, including a bullish weekly high close on Friday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral today. Today, shorter-term technical resistance comes in at Friday’s high of 1,794.00 and then at 1,800.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,780.00 and then at 1,775.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today on a corrective pullback from recent good gains that included a bullish weekly high close on Friday. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at Friday’s high of 3,561.75 and then at 3,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,540.00 and then at 3,525.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are weaker in early U.S. trading, on a corrective pullback after recent good gains that included a bullish weekly high close on Friday. Buy stops likely reside just above technical resistance at Friday’s high of 15,740 and then at 15,800. Sell stops likely reside just below technical support at 15,600 and then at 15,549. Shorter-term moving averages are still 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 bullish early today. Wyckoff's Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today. The bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the 133 16/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 3/32 and then at 132 28/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are slightly higher early today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 126.03.5 and then at Friday’s high of 126.09.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.26.0 and then at 125.20.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly lower early today. Bears have gained a bit of downside technical momentum just recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.840 and then at 81.000. Shorter-term support is seen at Friday’s low of 80.630 and then at 80.500. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

March Nymex crude oil prices are lower early today after hitting a six-week high above $100.00 a barrel early on. Bulls still have upside near-term technical momentum. In March Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.46 and then at $101.00. Look for sell stops just below technical support at the overnight low of $99.11 and then at $98.59. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed overnight. Traders are awaiting Monday morning’s monthly USDA supply and demand report. That report is expected by grain traders to be generally friendly for grains and soybeans. The grain market bulls have gained upside near-term technical momentum recently, to suggest market bottoms are in place for corn and wheat. Wheat has seen buying interest from concerns about winter kill in U.S. growing regions, following recent very cold weather. Some other raw commodity futures markets are also seeing price strength and bottoming action, which is also a bullish clue the entire raw commodity sector.

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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