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Jim Wyckoff's Morning Report: Markets Firmer Overnight

13 February 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - World stock markets are in a pause and corrective pullback mode Thursday following recent solid gains that have put the bulls back in near-term technical control.

While the rebounds in the U.S. stock indexes have been impressive, this 30-year chart watcher says beware, as the indexes could be setting themselves up for technically bearish double-top reversal patterns forming on the daily bar charts. In big bull runs, many times markets prices will back down from their for-the-move highs only to rebound strongly and challenge those highs (or even poke to new highs), and then back down again to form a bearish double-top reversal pattern on the daily chart, and begin to trend lower.

A major winter storm in the eastern and southeastern U.S. could make for more subdued trading during U.S. hours Thursday.

U.S. economic data due for release Thursday includes the weekly jobless claims report, advance retail sales, and manufacturing and trade inventories. Fed Chair Janet Yellen’s speech to a Senate Banking committee has been cancelled due to the weather.

Wyckoff’s Daily Risk Rating: 5.0 (World markets and the market place is calmer Thursday.)

(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. Bulls have regained upside near-term technical momentum. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish today. Today, shorter-term technical resistance comes in at the overnight high of 1,816.40 and then at this week’s high of 1,823.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,800.00 and then at this week’s low of 1,786.50. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today. Bulls have regained upside near-term technical momentum. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-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 the overnight high of 3,623.50 and then at the January high of 3,635.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,600.00 and then at 3,578.00. 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 have regained upside near-term technical momentum. Buy stops likely reside just above technical resistance at 15,900 and then at 15,943. Sell stops likely reside just below technical support at 15,800 and then at 15,760. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Wyckoff's Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today. The bulls have faded but with today’s gains they do have the slight 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 133 even and then at 133 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 8/32 and then at this week’s low of 132 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are higher early today. Bulls have faded but do have the slight 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 early today. Shorter-term resistance lies at Wednesday’s high of 125.19.5 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.08.0 and then at this week’s low of 125.03.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The March U.S. dollar index is solidly lower early today and hit a three-week low overnight. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 80.510 and then at the overnight high of 81.750. Shorter-term support is seen at the overnight low of 80.310 and then at the January low of 80.220. Wyckoff's Intra Day Market Rating: 3.5

NYMEX CRUDE OIL

March Nymex crude oil prices are lower early today on profit taking after hitting a six-week high Wednesday. Bulls still have some near-term technical momentum. A five-week-old uptrend is in place on the daily bar chart. In March Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.36 and then at $101.00. Look for sell stops just below technical support at the overnight low of $99.40 and then at $99.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were firmer overnight. Thursday morning’s weekly USDA export sales report will be closely examined by traders, as focus is on demand for U.S. grains. There are worries China will cancel more previously booked U.S. soybean purchases in the near term. But the grain market bulls still have some upside near-term technical momentum to suggest market bottoms are in place for corn and wheat. The raw commodity market sector is showing signs of a collective bottom being in place, and that’s a bullish underlying factor for the grains.

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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