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Jim Wyckoff's Morning Report: Markets Mostly Weaker Overnight

25 February 2014
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - In overnight news, China’s stock markets were pressured by news the China central bank drained over 100 billion yuan from the Chinese financial system.

The move is a short-term tightening of China’s monetary policy, but the longer-term implications of the move are unclear. The move by the Peoples Bank of China did not have much of an impact on world markets.

Traders will be looking for some direction from U.S. economic data due for release Tuesday, highlighted by the consumer confidence index. Other U.S. data due out Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the S&P/Case-Shiller home price index, the house price index, and the Richmond Fed business survey.

The Ukrainian civil unrest remains a significant geopolitical factor for the market place. Attention is turning from who will lead Ukraine to how will the nation can survive, financially.

The U.S., the European Union and the International Monetary Fund are trying to figure out how to prop up Ukraine’s financial system before it collapses. The situation there remains fluid. The Ukrainian developments and some civil unrest and violence in Thailand recently have prompted increased safe-haven demand for gold.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine uncertainty and recent Thailand unrest are keeping some risk aversion in the market place.)

(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 lower in early U.S. trading today after hitting a new record high Monday. The bulls still have the solid overall near-term technical advantage. 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 neutral to bearish early today. Today, shorter-term technical resistance comes in at Monday’s all-time high of 1,856.50 and then at 1,865.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,830.00 and then at last week’s low of 1,817.60. 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 on profit taking after prices hit a 13.5-year high on Monday. 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 neutral to bearish early today. Shorter-term technical resistance is located at Monday’s high of 3,701.50 and then at 3,715.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 3,655.00 and then at last week’s low of 3,638.25. 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 profit taking after hitting a five-week high on Monday. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 16,200 and then at 16,250. Sell stops likely reside just below technical support at Monday’s low of 16,110 and then at Friday’s low of 16,080. 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 on short covering. 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 neutral early today. Shorter-term resistance lies at Monday’s high of 133 10/32 and then at 133 15/32. Buy stops likely reside just above those levels.

Shorter-term technical support lies at the overnight low of 132 30/32 and then at Monday’s low of 132 21/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are slightly higher early today. 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 Monday’s high of 125.24.0 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 125.08.5 and then at the February low of 125.03.0. 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. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.270 and then at Monday’s high of 80.400. Shorter-term support is seen at the overnight low of 80.100 and then at last week’s low of 79.950. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

April Nymex crude oil prices are lower early today on profit taking. Bulls still have the overall near-term technical momentum. A steep seven-week-old uptrend is still in place on the daily bar chart. In April Nymex crude, look for buy stops to reside just above resistance at $102.50 and then at $103.00. Look for sell stops just below technical support at $101.69 and then at $101.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed but mostly slightly weaker overnight—soybeans and corn weaker and wheat near steady. Hot and dry weather late in the growing season in South America is hurting the soybean crop there. Grain market bulls still have some upside technical momentum. The overall technical posture of the raw commodity sector is turning more bullish, which is supporting fresh speculative buying interest in the commodity sector, including the grain futures.

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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