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Jim Wyckoff's Morning Report: Traders Await US Economic Data

19 February 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Traders and investors today get a solid dose of U.S. economic data, including the release of the minutes of the latest meeting of the Federal Reserve’s Open Market Committee (FOMC).

Given some recent weaker U.S. economic data, the market place will pay extra close attention to the FOMC minutes, to try to better discern the tenor of the committee on its future monetary policy intentions.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Johnson Redbook and Goldman Sachs chain store sales reports, the producer price index, and new residential construction.

Violence in Ukraine this week is getting major news coverage. If that situation escalates, more risk aversion could enter the market place to more directly impact markets.

Wyckoff’s Daily Risk Rating: 6.0 (The violence in Ukraine and some important U.S. economic reports due out have put some more risk into the market place Wednesday.)

(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 slightly weaker in early U.S. trading. Bulls still have some upside near-term technical momentum as prices hover not far below the all-time 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today.

Today, shorter-term technical resistance comes in at this week’s high of 1,840.00 and then at the December all-time high of 1,846.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,825.00 and then at 1,815.00. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly lower early today after hitting a 13.5-year high Tuesday. Bulls have upside near-term technical momentum. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day.

Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at the overnight high of 3,679.50 and then at Tuesday’s high of 3,684.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 3,654.00 and then at 3,638.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are lower in early U.S. trading. Bulls still have some upside near-term technical momentum. Buy stops likely reside just above technical resistance at 16,107 and then at Tuesday’s high of 16,135. Sell stops likely reside just below technical support at 16,000 and then at 15,965. Shorter-term moving averages are bullish early today, as the 4-day moving average is above 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: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are firmer early today. The bulls are gaining some upside technical momentum this week. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 133 26/32 and then at 134 even.

Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 10/32 and then at 133 even. 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. Bulls are gaining upside 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 bullish early today. Shorter-term resistance lies at the overnight high of 126.08.0 and then at the February high of 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.00.0 and then at the overnight low of 125.29.5. 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 slightly higher early today, on more tepid short covering after hitting a seven-week low overnight. Bears still have downside near-term technical momentum. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Tuesday’s high of 80.265 and then at 80.360. Shorter-term support is seen at the overnight low of 79.955 and then at 79.820. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

March Nymex crude oil prices are higher early today and hovering near Tuesday’s 5.5-month high. Bulls have near-term technical momentum. A steep six-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 Tuesday’s high of $103.25 and then at $104.00. Look for sell stops just below technical support at the overnight low of $102.49 and then at $102.00. Wyckoff's Intra-Day Market Rating: 6.0

GRAINS

Markets were narrowly mixed overnight, as markets paused from recent gains that saw corn, soybeans and wheat hit multi-week highs just recently. Soybeans are supported this week on talk of some crop problems in South American soybean regions. Fundamentally, improving demand for U.S. grains has boosted the futures markets recently. Technically, the grain market bulls have upside near-term technical momentum to suggest market bottoms are in place for corn and wheat.

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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