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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Afternoon Markets Report--Oct. 24

Oct 25, 2012

Wednesday Evening, October 24-Jim Wyckoff's Daily Markets
Update

Questions? Just email me at jim@jimwyckoff.com . I enjoy
hearing from my readers worldwide.--Jim

Click below for "Today’s Hot Market" item on my website.

http://www.jimwyckoff.com/hotmarket/hotmarket.asp

Dear Valued Subscriber: Following are today's significant
developments in the U.S. futures markets.

(NOTE: I am out of the office today and Thursday, speaking at an investing
conference in New Orleans. My friend and fellow trader/analyst Ken Seehusen
produced my daily report today. Ken's style is a bit different than mine, but I think
you'll benefit and enjoy his work, too. --Jim)

The STOCK INDEXES

The December NASDAQ 100 closed lower on Wednesday but remains above the 50%
retracement level of the June-September rally crossing at 2657.37. The low-range close sets the
stage for a steady to lower opening when Thursday’s night session begins trading. Stochastics and
the RSI are diverging but are neutral to bearish signaling that sideways to lower prices are
possible near-term. If December extends the decline off September’s high, the 62% retracement
level of the June-September rally crossing at 2606.66 is the next downside target. Closes above
the 20-day moving average crossing at 2747.50 would confirm that a short-term low has been
posted. First resistance is the 20-day moving average crossing at 2747.50. Second resistance is
the reaction high crossing at 2778.75. First support is today’s low crossing at 2648.25. Second
support is the 62% retracement level of the June-September rally crossing at 2606.66.

The December S&P 500 closed lower on Wednesday as it extends the decline off this month’s
high. The low-range close sets the stage for a steady to lower opening when Thursday’s night
session begins trading. Stochastics and the RSI are bearish signaling that sideway to lower prices
is possible near-term. If December extends this month’s decline, the 38% retracement level of the
June-September rally crossing at 1385.79 is the next downside target. Closes above the 20-day
moving average crossing at 1436.58 would temper the near-term bearish outlook. First resistance
is the 20-dasy moving average crossing at 1436.58. Second resistance is the reaction high
crossing at 1459.50. First support is Tuesday’s low crossing at 1447.70. Second support is the
38% retracement level of the June-September rally crossing at 1385.79. 

The Dow closed lower on Wednesday as slow growth in employment and strains in financial
markets continue to pose risks to the economy. The low-range close sets the stage for a steady to
lower opening on Wednesday. Stochastics and the RSI are diverging but are bearish signaling that
sideways to lower prices are possible near-term. If the Dow extends this month’s decline, the
38% retracement level of the June-October rally crossing at 13,042 is the next downside target.
Closes above the 20-day moving average crossing at 13,448 would confirm that a short-term low
has been posted. First resistance is the 20-day moving average crossing at 13,448. Second
resistance is last Thursday’s high crossing at 13,588. First support is today’s low crossing at
13,083. Second support is the 38% retracement level of the June-October rally crossing at 13,044.

INTEREST RATES

December T-bonds closed down 17/32’s at 147-07. 

December T-bonds closed lower on Wednesday as it consolidated some of its recent short
covering gains. The low-range close sets the stage for a steady to lower opening on Thursday.
Stochastics and the RSI have turned bullish hinting that a low might be in or is near. Closes above
the 20-day moving average crossing at 148-14 would temper the bearish outlook. If December
renews this month’s decline, September’s low crossing at 144-15 is the next downside target.
First resistance is the 20-day moving average crossing at 148-14. Second resistance is the reaction
high crossing at 150-09. First support is last Friday’s low crossing at 146-06. Second support is
September’s low crossing at 144-15. 

ENERGY MARKETS

December crude oil closed lower on Wednesday as it extends the decline off September’s high.
The low-range close sets the stage for a steady to lower opening when Thursday’s night session
begins. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible
near-term. If December extends the decline off September’s high, the 75% retracement level of
the June-September rally crossing at 84.64 is the next downside target. Closes above the 20-day
moving average crossing at 91.05 would confirm that a short-term low has been posted. First
resistance is the 20-day moving average crossing at 91.05. Second resistance is last Friday’s high
crossing at 93.49. First support is the 75% retracement level of the June-September rally crossing
at 84.64. Second support is the 87% retracement level of the June-September rally crossing at
81.89.  

December heating oil closed lower on Wednesday as it extended the decline off last Friday’s
high. The mid-range close sets the stage for a steady opening when Thursday’s night session
begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are
possible near-term. If December extends this week’s decline, the 38% retracement level of the
June-October rally crossing at 298.80 is the next downside target. Closes above last Friday’s high
crossing at 320.35 would confirm that a short-term low has been posted. First resistance is last
Friday’s high crossing at 322.69. Second resistance is this month’s high crossing at 326.68. First
support is today’s low crossing at 300.36. Second support is the 38% retracement level of the
June-October rally crossing at 298.80. 

December unleaded gas closed lower on Wednesday as it extends this month’s decline. The mid-
range close sets the stage for a steady to lower opening when Thursday’s night session begins
trading. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower
prices are possible near-term. If December extends this month’s decline, the 50% retracement
level of the June-October rally crossing at 253.49 is the next downside target. Closes above the
20-day moving average crossing at 275.36 would confirm that a short-term low has been posted.
First resistance is the 20-day moving average crossing at 275.36. Second resistance is this
month’s high crossing at 286.20. First support is today’s low crossing at 255.98. Second support
is the 50% retracement level of the June-October rally crossing at 253.49. 

December Henry natural gas closed lower on Wednesday. The low-range close sets the stage for a
steady to lower opening on Thursday. Stochastics and the RSI are diverging and have turned
bearish signaling that sideways to lower prices are possible near-term. Multiple closes below the
20-day moving average crossing at 3.768 would confirm that a short-term top has been posted. If
December extends the rally off August’s low, the 50% retracement level of the 2011-2012-
decline crossing at 4.242 is the next upside target. First resistance is last Friday’s high crossing at
3.970. Second resistance is the 50% retracement level of the 2011-2012-decline crossing at 4.242.
First support is the 20-day moving average crossing at 3.768. Second support is the reaction low
crossing at 3.728.

CURRENCIES

The December Dollar closed lower on Wednesday as it consolidates some of the rally off last
week’s low. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and
the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes
above the reaction high crossing at 80.31 are needed to confirm that a short-term low has been
posted. If December renews last week’s decline, September’s low crossing at 78.72 is the next
downside target. First resistance is the reaction high crossing at 80.31. Second resistance is the
38% retracement level of the July-September decline crossing at 80.97. First support is last
Wednesday’s low crossing at 78.97. Second support is September’s low crossing at 78.72.

The December Euro closed lower on Tuesday. The mid-range close sets the stage for a steady to
lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower
prices are possible near-term. Multiple closes below the 20-day moving average crossing at
129.75 are needed to confirm that a short-term top has been posted. If December extends this
month’s rally, September’s high crossing at 131.83 is the next upside target. First resistance is
September’s high crossing at 131.83. Second resistance is the 50% retracement level of this
year’s decline crossing at 132.52. First support is the 20-day moving average crossing at 129.75.
Second support is the reaction low crossing at 128.33.  

The December British Pound closed higher due to short covering on Wednesday as it
consolidated some of the decline off September’s high. The high-range close sets the stage for a
steady to higher opening when Thursday’s night session begins trading. Stochastics and the RSI
are diverging but remain neutral to bearish signaling that sideways to lower prices are possible
near-term. If December extends the decline off September’s high, the 50% retracement level of
the June-September rally crossing at 1.5821 is the next downside target. Closes above the 20-day
moving average crossing at 1.6076 would confirm that a short-term low has been posted. First
resistance is the 20-day moving average crossing at 1.6076. Second resistance is the reaction high
crossing at 1.6175. First support is Tuesday’s low crossing at 1.5909. Second support is the 50%
retracement level of the June-September rally crossing at 1.5821. 

The December Swiss Franc closed slightly higher due to short covering on Wednesday. The high-
range close sets the stage for a steady to higher opening when Thursday’s night session begins
trading. Stochastics and the RSI are bearish hinting that a double top with September’s high
might be forming. Closes below the reaction low crossing at .10609 would confirm that a double
top has been posted. If December renews this month’s rally, the 25% retracement level of the
2011-2012-decline crossing at .11090 is the next upside target. First resistance is last Tuesday’s
high crossing at .10861. Second resistance is the 25% retracement level of the 2011-2012-decline
crossing at .11090. First support is the 20-day moving average crossing at .10729. Second support
is the reaction low crossing at .10609.

The December Canadian Dollar closed lower on Wednesday as it extended the decline off
September’s high. The low-range close sets the stage for a steady to lower opening when
Thursday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral
to bearish signaling that sideways to lower prices are possible near-term. If December extends the
aforementioned decline, the 50% retracement level of the June-September rally crossing at 99.51
is the next downside target. Closes above the 20-day moving average crossing at 101.49 would
confirm that a short-term low has been posted. First resistance is the 20-day moving average
crossing at 101.49. Second resistance is the reaction high crossing at 102.56. First support is
Tuesday’s low crossing at 100.12. Second support is the 50% retracement level of the June-
September rally crossing at 99.51.

The December Japanese Yen closed higher due to short covering on Wednesday as it consolidates
some of this month’s decline. The high-range close sets the stage for a steady to higher opening
when Thursday’s night session begins trading. Stochastics and the RSI are oversold but remain
neutral to bearish signaling that sideways to lower prices are possible. If December extends this
month’s decline, the 50% retracement level of the March-September rally crossing at .12479 is
the next downside target. Closes above the 20-day moving average .12718 would confirm that a
short-term low has been posted. First resistance is the 20-day moving average crossing at .12718.
Second resistance is the reaction high crossing at .12836. First support is Tuesday’s low crossing
at .12503. Second support is the 50% retracement level of the March-September rally crossing at
.12479.

PRECIOUS METALS

December gold closed lower on Wednesday as it extends this month’s decline. The low-range
close sets the stage for a steady to lower opening when Thursday’s night session begins trading.
Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term.
If December extends this month’s decline, the 38% retracement level of the May-October rally
crossing at 1698.00 is the next downside target. Closes above the 20-day moving average
crossing at 1757.50 are needed to confirm that a short-term low has been posted. First resistance
is the 10-day moving average crossing at 1737.40. Second resistance is the 20-day moving
average crossing at 1757.50. First support is today’s low crossing at 1698.70. Second support is
the 38% retracement level of the May-October rally crossing at 1698.00.   

December silver closed lower on Wednesday as it extended this month’s decline. The low-range
close set the stage for a steady to lower opening when Thursday’s night session begins trading.
Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to
lower prices are possible near-term. If December extends this month’s decline, the 50%
retracement level of the June-October rally crossing at 30.850 is the next downside target. Closes
above the 20-day moving average crossing at 33.640 would signal that a short-term low has been
posted. First resistance is the 10-day moving average crossing at 32.748. Second resistance is the
20-day moving average crossing at 33.640. First support is today’s low crossing at 31.535.
Second support is the 50% retracement level of the June-October rally crossing at 30.850.

December copper closed slightly higher due to light short covering on Wednesday as it
consolidates above the 50% retracement level of the June-September rally crossing at 355.15. The
mid-range close sets the stage for a steady to lower opening when Thursday’s night session
begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that
sideways to lower prices are possible near-term. If December extends this month’s decline, the
62% retracement level of the June-September rally crossing at 348.30 is the next downside target.
Closes above the 20-day moving average crossing at 371.68 would confirm that a short-term low
has been posted. First resistance is the 10-day moving average crossing at 367.46. Second
resistance is the 20-day moving average crossing at 371.68. First support is the 50% retracement
level of the June-September rally crossing at 355.15. Second support is the 62% retracement level
of the June-September rally crossing at 348.30.

GRAINS

December Corn closed down 1 1/2-cents at 7.54 1/2.

December corn closed lower on Wednesday as it extends Tuesday’s decline. The low-range close
sets the stage for a steady to lower opening when Thursday’s night session begins trading.
Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are
possible near-term. Closes below the reaction low crossing at 7.32 1/4 would confirm that a short-
term top has been posted. If December renews the rally off September’s low, the reaction high
crossing at 7.89 1/2 is the next upside target. First resistance is the reaction high crossing at 7.76.
Second resistance is the reaction high crossing at crossing at 7.89 1/2. First support is the reaction
low crossing at 7.32 1/4. Second support is the late-September low crossing at 7.05.

December wheat closed down 15 1/4-cents at 8.84.

December wheat closed higher on Wednesday as it extends the rally off last week’s low. The
high-range close sets the stage for a steady to higher opening when Thursday’s night session
begins trading. Stochastics and the RSI are bullish signaling that sideways to higher prices are
possible near-term. Closes above the reaction high crossing at 8.94 are needed to confirm that a
short-term low has been posted. From a broad perspective, December wheat needs to close above
9.53 1/4 or below 8.40 1/4 to confirm a breakout of this summer’s trading range and point the
direction of the next trending move. First resistance is August’s high crossing at 9.45 1/2. Second
resistance is July’s high crossing at 9.53 1/4. First support is last Monday’s low crossing at 8.40
1/4. Second support is the 38% retracement level of this summer’s rally crossing at 8.29 3/4. 

December Kansas City Wheat closed up 13 1/2-cents at 9.21 1/4.

December Kansas City wheat closed higher on Wednesday and above the reaction high crossing
at 9.21 confirming that a short-term low has been posted. The low-range close sets the stage for a
steady to lower opening on Thursday. Stochastics and the RSI remain bullish signaling that
sideways to higher prices are possible near-term. If December extends this week’s rally,
September’s high crossing at 9.49 1/4 is the next upside target. Closes below the 20-day moving
average crossing at 89.76 would temper the near-term friendly outlook. First resistance is today’s
high crossing at 9.31 3/4. Second resistance is September’s high crossing at 9.49 1/4. First
support is the 20-day moving average crossing at 8.97 3/4. Second support is August’s low
crossing at 8.74 1/2.

December Minneapolis wheat closed up 10-cents at 9.55.

December Minneapolis wheat closed higher on Wednesday as it extends the rally off last week’s
low. The high-range close sets the stage for a steady to higher opening when Thursday’s night
session begins to trade. Stochastics and the RSI remain bullish signaling that sideways to higher
prices are possible near-term. Closes above the reaction high crossing at 9.64 are needed to
confirm that a short-term low has been posted. If December renews the decline off July’s high,
the 50% retracement level of this summer’s rally crossing at 8.84 is the next downside target.
First resistance is the reaction high crossing at 9.64. Second resistance is September’s high
crossing at 9.83 1/2. First support is August’s low crossing at 9.12 1/4. Second support is the 50%
retracement level of this summer’s rally crossing at 8.84.

SOYBEAN COMPLEX

November soybeans closed up 17 1/4-cents at 15.70 1/2.

November soybeans closed higher on Wednesday as it extends the rally off last week’s low. The
high-range close sets the stage for a steady to higher opening when Thursday’s night session
begins trading. Stochastics and the RSI remain bullish signaling that sideways to higher prices are
possible near-term. If November extends the aforementioned rally, the 38% retracement level of
the September-October decline crossing at 16.02 3/4 is the next upside target. Closes below the
10-day moving average crossing at 15.31 1/2 would temper the near-term friendly outlook. First
resistance is today’s high crossing at 15.74 3/4. Second resistance is the 38% retracement level of
the September-October decline crossing at 16.02 3/4. First support is the 10-day moving average
crossing at 15.31 1/2. Second support is last Monday’s low crossing at 14.85 3/4.

December soybean meal closed up $5.70 at $481.90.

December soybean meal closed higher on Wednesday as it extends the rally off last week’s low.
The high-range close sets the stage for a steady to higher opening when Thursday’s night session
begins trading. Stochastics and the RSI remain bullish signaling that sideways to higher prices are
possible near-term. If December extends the rally off last week’s low, the 38% retracement level
of the September-October decline crossing at 486.00 is the next upside target. Closes below the
10-day moving average crossing at 465.70 would temper the near-term friendly outlook. If
December renews the decline off September’s high, the 50% retracement level of this summer’s
rally crossing at 446.50 is the next downside target. First resistance is the 38% retracement level
of the September-October decline crossing at 486.00. Second resistance is the 50% retracement
level of the September-October decline crossing at 496.80. First support is the 10-day moving
average crossing at 465.70. Second support is last Wednesday’s low crossing at 450.20. 

December soybean oil closed up 52-pts. at 51.84.

December soybean closed higher on Wednesday as it consolidates above the 20-day moving
average crossing at 51.27. The high-range close sets the stage for a steady to higher opening when
Thursday’s night session begins trading. Stochastics and the RSI remain neutral to bullish
signaling that sideways to higher prices are possible near-term. If December renews the rally off
last week’s low, the 38% retracement level of the September-October decline crossing at 52.92 is
the next upside target. If December renews the decline off September’s high, June’s low crossing
at 48.64 is the next downside target. First resistance is the 38% retracement level of the
September-October decline crossing at 52.92. Second resistance is 50% retracement level of the
September-October decline crossing at 54.01. First support is last Monday’s low crossing at
49.41. Second support is June’s low crossing at 48.64. 

LIVESTOCK

December hogs closed up $0.13 at $78.25.

December hogs closed higher due to short covering on Wednesday and filled Tuesday’s gap
crossing at 78.60. The low-range close sets the stage for a steady to lower opening when
Thursday’s night session begins trading. Stochastics and the RSI have turned bearish signaling
that a short-term top might be in or is near. Closes below the 20-day moving average crossing at
77.26 would confirm that a short-term top has been posted. If December renews the rally off
September’s low, the 87% retracement level of the July-September decline crossing at 80.73 is
the next upside target. First resistance is last Friday’s high crossing at 79.77. Second resistance is
the 87% retracement level of this year’s decline crossing at 80.73. First support is the 20-day
moving average crossing at 77.26. Second support is the reaction low crossing at 76.55.

December cattle closed up $0.22 at 127.07.

December cattle closed higher due to short covering on Wednesday as it consolidated some of
Tuesday’s decline. The mid-range close sets the stage for a steady to lower opening when
Thursday’s night session begins trading. Stochastics and the RSI are bearish signaling that
sideways to lower prices are possible near-term. Closes below the 20-day moving average
crossing at 126.41 would confirm that a short-term top has been posted. If December renews the
rally off September’s low, the reaction high crossing at 129.20 is the next upside target. First
resistance is last Thursday’s high crossing at 128.32. Second resistance is the reaction high
crossing at 129.20. First support is the 20-day moving average crossing at 126.41. Second support
is the reaction low crossing at 125.45. 

November feeder cattle closed up $0.12 at $147.17.

November Feeder cattle posted an inside day with a higher close on Wednesday as it consolidated
some of the decline off last week’s high. The low-range close sets the stage for a steady to lower
opening when Thursday’s night session begins trading. Stochastics and the RSI are bearish
signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving
average crossing at 146.62 would confirm that a short-term top has been posted. If November
renews this month’s rally, the 50% retracement level of the June-July decline crossing at 151.96
is the next upside target. First resistance is last Thursday’s high crossing at 149.60. Second
resistance is the 50% retracement level of the June-July decline crossing at 151.96. First support
is the 20-day moving average crossing at 146.62. Second support is the reaction low crossing at
143.80.   

FOOD & FIBER

December coffee close lower on Wednesday and the low-range close sets the stage for a steady to
lower opening on Thursday. Stochastics and the RSI are oversold but are turning neutral to
bullish hinting that a low might be in or is near. Closes above the 20-day moving average
crossing at 16.72 are needed to confirm that a short-term low has been posted. If December
renews this month’s decline, September’s low crossing at 15.65 is the next downside target.

December cocoa closed sharply lower on Wednesday and below the 10-day moving average
crossing at 24.21 tempering the near-term friendly outlook. The low-range close sets the stage for
a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bullish signaling
that sideways to higher prices are possible near-term. If December extends the rally off the
reaction low crossing at 23.38, the reaction high crossing at 25.95 is the next upside target.

March sugar closed higher due to short covering on Wednesday. The mid-range close set the
stage for a steady opening on Thursday. Stochastics and the RSI are neutral to bearish signaling
that sideways to lower prices are possible near-term. If March extends this month’s decline,
September’s low crossing at 19.48 is the next downside target. Closes above the 20-day moving
average crossing at 20.62 would confirm that a low has been posted.

December cotton closed lower on Wednesday and below the 20-day moving average crossing at
73.11 confirming that a short-term top has been posted. The low-range close sets the stage for a
steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways
to lower prices are possible near-term. If December extends this week’s decline, the reaction low
crossing at 70.41 is the next downside target. If December renews last week’s rally, the 38%
retracement level of the 2011-2012-decline crossing at 80.89 is the next upside target.

Click below for my welcome letter to all new customers and for an explanation of my Market Rating
System.

http://www.jimwyckoff.com/newsletter/WelcomeAboard/

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.

Jim Wyckoff
 

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