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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. 25

Oct 26, 2012

Thursday Evening, October 25--Jim Wyckoff's Daily Markets Update

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

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

(NOTE: I had a speaking engagement in New Orleans, so my friend and fellow trader/analyst
Ken Seehusen produced my 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 higher due to short covering on Thursday but
remains below the 50% retracement level of the June-September rally crossing at
2657.37. The mid-range close sets the stage for a steady to lower opening when
Friday’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 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 2739.23 would confirm that a
short-term low has been posted. First resistance is the 10-day moving average
crossing at 2702.80. Second resistance is the 20-day moving average crossing at
2739.23. First support is today’s low crossing at 2642.25. Second support is the 62%
retracement level of the June-September rally crossing at 2606.66.

The December S&P 500 closed higher due to short covering on Thursday as it
consolidates some of the decline off this month’s high. The mid-range close sets the
stage for a steady opening when Friday’s night session begins trading. Stochastics
and the RSI are oversold but remain neutral to 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 1434.86
would temper the near-term bearish outlook. First resistance is the 20-day moving
average crossing at 1434.86. Second resistance is the reaction high crossing at
1459.50. First support is today’s low crossing at 1399.70. Second support is the 38%
retracement level of the June-September rally crossing at 1385.79.

The Dow closed higher due to short covering on Thursday after testing the 38%
retracement level of the June-October rally crossing at 13,042. The mid-range close
sets the stage for a steady opening on Friday. Stochastics and the RSI are oversold
but remain bearish signaling that sideways to lower prices are possible near-term. If
the Dow extends this month’s decline, the 50% retracement level of the June-
October rally crossing at 12,850 is the next downside target. Closes above the 20-
day moving average crossing at
13,411 would confirm that a short-term low has been posted. First resistance is the
10-day moving average crossing at 13,337. Second resistance is the 20-day moving
average crossing at 13,411 First support is the 38% retracement level of the June-
October rally crossing at 13,044. Second support is the 50% retracement level of the
June-October rally crossing at 12,850.

INTEREST RATES

December T-bonds closed down 20/32’s at 146-27. December T-bonds closed lower
on Thursday hinting that the recent short covering rebound may have ended. The
mid-range close sets the stage for a steady to lower opening on Friday. Stochastics
and the RSI are neutral to bullish hinting that a low might be in or is near. Closes
above the 20-day moving average crossing at 148-09 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 148-09. Second resistance is the reaction high crossing at 150-09. First
support is today’s low crossing at 146-02. Second support is September’s low
crossing at 144-15.

ENERGY MARKETS

December crude oil closed higher due to short covering on Thursday as it
consolidates some of the decline off September’s high. The mid-range close sets the
stage for a steady to higher opening when Friday’s night session begins. Stochastics
and the RSI are oversold but remain 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 90.75 would
confirm that a short-term low has been posted. First resistance is the 20-day moving
average crossing at 90.75. 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 higher on Thursday as it consolidated some of the
decline off last Friday’s high. The high-range close sets the stage for a steady to
higher opening when Friday’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 week’s decline, the 38% retracement
level of the June-October rally crossing at 298.80 is the next downside target. Closes
above the 20-day moving average crossing at 313.32 would confirm that a short-
term low has been posted. First resistance is the 20-day moving average crossing at
313.32. Second resistance is last Friday’s high crossing at 322.69. First support is
Wednesday’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 higher on Thursday as it consolidates some of this
month’s decline. The high-range close sets the stage for a steady to higher opening
when Friday’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
253.49 is the next downside target. Closes above the 20-day moving average
crossing at 274.63 would confirm that a short-term low has been posted. First
resistance is the 20-day moving average crossing at 274.63. Second resistance is
this month’s high crossing at 286.20. First support is Wednesday’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 Thursday. The mid-range close sets the
stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish
signaling that sideways to lower prices are possible near-term. Closes below the
reaction low crossing at 3.727 would confirm that a short-term top has been posted.
If December renews 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 3.778. Second support is the reaction low crossing at 3.727.

CURRENCIES

The December Dollar closed higher on Thursday as it extends the rally off last week’s
low. The high-range close sets the stage for a steady to higher opening on Friday.
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 an upside breakout of this month’s trading range. If December renews the
decline off this month’s high, 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 Thursday and below the 20-day moving
average. The low-range close sets the stage for a steady to lower opening on Friday.
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
129.76 are needed to confirm that a short-term top has been posted. Closes below
the July-August uptrend line crossing near 129.10 would confirm a trend change has
taken place. If December renews 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 129.76.
Second support is the July-August uptrend line crossing near 129.10.

The December British Pound closed higher on Thursday and above the 20-day
moving average crossing at 1.6071 confirming that a short-term low has been
posted. The high-range close sets the stage for a steady to higher opening when
Friday’s night session begins trading. Stochastics and the RSI are diverging and are
turning neutral to bullish signaling that sideways to higher prices are possible near-
term. If December extends today’s rally, the reaction high crossing at 1.6175 is the
next upside target. If December renews the decline off September’s high, the 50%
retracement level of the June-September rally crossing at 1.5821 is the next
downside target. First resistance is the reaction high crossing at 1.6175. Second
resistance is the reaction high crossing at 1.6213. 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 lower on Thursday and below the July-August
uptrend line crossing near .10719. The low-range close sets the stage for a steady to
lower opening when Friday’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
Wednesday’s low crossing at .10689. Second support is the reaction low crossing at
.10609.

The December Canadian Dollar closed unchanged on Thursday as it extended this
week’s trading range. The low-range close sets the stage for a steady to lower
opening when Friday’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 101.43 would confirm
that a short-term low has been posted. First resistance is the 20-day moving
average crossing at 101.43. 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 lower on Thursday and below the 50%
retracement level of the March-September rally crossing at .12479 as it extends this
month’s decline. The low-range close sets the stage for a steady to lower opening
when Friday’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 62% retracement level of the March-
September rally crossing at .12360 is the next downside target. Closes above the
20-day moving average .12696 would confirm that a short-term low has been
posted. First resistance is the 10-day moving average crossing at .12609. Second
resistance is the 20-day moving average crossing at .12696. First support is today’s
low crossing at .12451. Second support is the 62% retracement level of the March-
September rally crossing at .12360.

PRECIOUS METALS

December gold closed higher due to short covering on Thursday as it consolidates
some of this month’s decline. The high-range close sets the stage for a steady to
higher opening when Friday’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 50% retracement level of the May-
October rally crossing at 1667.00 is the next downside target. Closes above the 20-
day moving average crossing at 1754.10 are needed to confirm that a short-term
low has been posted. First resistance is the 10-day moving average crossing at
1731.60.
Second resistance is the 20-day moving average crossing at 1754.10. First support is
Wednesday’s low crossing at 1698.70. Second support is the 50% retracement level
of the May-October rally crossing at 1667.00.

December silver closed higher due to short covering on Thursday as it consolidates
some of this month’s decline. The high-range close set the stage for a steady to
higher opening when Friday’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 33.507 would signal that a short-term
low has been posted. First resistance is the 10-day moving average crossing at
32.537. Second resistance is the 20-day moving average crossing at 33.506.
First support is Wednesday’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 lower on Thursday as it consolidates above the 50%
retracement level of the June-September rally crossing at 355.15. The low-range
close sets the stage for a steady to lower opening when Friday’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 370.73 would confirm that a short-term low has been posted. First
resistance is the 10-day moving average crossing at 365.49. Second resistance is
the 20-day moving average crossing at 370.73. 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 12 1/2-cents at 7.42. December corn closed lower on
Thursday following another disappointing export sales report. The low-range close
sets the stage for a steady to lower opening when Friday’s night session begins
trading. Stochastics and the RSI are turning 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 up 11 1/4-cents at 8.72 3/4. December wheat closed lower
due to profit taking on Thursday as it consolidated some of the rally off last week’s
low. The low-range close sets the stage for a steady to lower opening when Friday’s
night session begins trading. Stochastics and the RSI remain neutral to 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 down 7-cents at 9.14 1/4. December Kansas
City wheat closed lower due to profit taking on Thursday as it consolidated some of
Wednesday’s rally. The low-range close sets the stage for a steady to lower opening
on Friday. Stochastics and the RSI remain neutral to 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 8.99 1/2 would temper the near-term friendly
outlook. First resistance is Wednesday’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 8.99 1/2. Second support is August’s low crossing at 8.74 1/2.

December Minneapolis wheat closed down 9 3/4-cents at 9.45 1/4. December
Minneapolis wheat closed lower on Thursday as it consolidated some of the rally off
last week’s low. The low-range close sets the stage for a steady to lower opening
when Friday’s night session begins to trade. Stochastics and the RSI are turning
neutral hinting that a short-term top might be in or is near. Closes below the 20-day
moving average crossing at 9.35 3/4 would signal that a short-term top has been
posted. Closes above the reaction high crossing at 9.64 are needed to confirm that a
short-term low has been posted. 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 the
20-day moving average crossing at 9.35 3/4. Second support is August’s low
crossing at 9.12 1/4.

SOYBEAN COMPLEX

January soybeans closed down 6 1/4-cents at 15.66. January soybeans closed lower
due to profit taking on Thursday as it consolidates some of the rally off last week’s
low. The mid-range close sets the stage for a steady opening when Friday’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 15.34 would temper the near-term friendly outlook. First
resistance is today’s high crossing at 15.76. 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 15.34. Second support is last
Monday’s low crossing at 14.85 3/4.

December soybean meal closed down $0.50 at $481.40. December soybean meal
closed lower on Thursday as it consolidated some of the rally off last week’s low. The
high-range close sets the stage for a steady to higher opening when Friday’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 466.60 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 466.60.
Second support is last Wednesday’s low crossing at 450.20.

December soybean oil closed up 39-pts. at 51.45. December soybean closed lower
on Thursday as it extends this week’s trading range above the 20-day moving
average crossing at 51.21. The low-range close sets the stage for a steady to lower
opening when Friday’s night session begins trading. Stochastics and the RSI are
turning neutral to bearish hinting that a short-term top might be in or is near. If
December renews the decline off September’s high, June’s low crossing at 48.64 is
the next downside target. 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. 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 down $0.13 at $78.12. December hogs closed lower on
Thursday as it extended the decline off last Friday’s high. The high-range close sets
the stage for a steady to higher opening when Friday’s night session begins trading.
Stochastics and the RSI are bearish signaling that a short-term top might be in or is
near. Closes below the 20-day moving average crossing at 77.49 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 77.49. Second support is the
reaction low crossing at 76.55.

December cattle closed down $1.42 at 125.65. December cattle closed sharply lower
on Thursday and below the 20-day moving average crossing at 126.43 confirming
that a short-term top has been posted. The low-range close sets the stage for a
steady to lower opening when Friday ’s night session begins trading. Stochastics and
the RSI are bearish signaling that sideways to lower prices are possible near-term. If
December extends today’s decline, September’s low crossing at 123.95 is the next
downside target. Closes above Wednesday’s high crossing at 127.40 would temper
the near-term bearish outlook. First resistance is last Thursday’s high crossing at
128.32. Second resistance is the reaction high crossing at 129.20. First support is
today’s low crossing at 125.25. Second support is September’s low crossing at
123.95.

November feeder cattle closed down $1.12 at $146.05. November Feeder cattle
closed lower on Thursday and below the 20-day moving average crossing at 146.55
confirming that a short-term top has been posted. The low-range close sets the
stage for a steady to lower opening when Friday ’s night session begins trading.
Stochastics and the RSI are bearish signaling that sideways to lower prices are
possible near-term. If November extends today’s decline, the reaction low crossing
at 143.80 is the next downside target. Closes above Tuesday’s gap crossing at
147.72 would temper the near-term bearish outlook. First resistance is Tuesday’s
gap crossing at 147.72. Second resistance is last Thursday’s high crossing at 149.60.
First support is today’s low crossing at 145.60. Second support is the reaction low
crossing at 143.80.

FOOD & FIBER

December coffee close higher on Thursday and the high-range close sets the stage
for a steady to higher opening on Friday. Stochastics and the RSI are turning neutral
to bullish hinting that a low might be in or is near. Closes above the 20-day moving
average crossing at 16.65 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 higher due to short covering on Thursday but remains below
the 10-day moving average crossing at 24.26. The mid-range close sets the stage
for a steady opening on Friday. Stochastics and the RSI are turning bearish signaling
that sideways to lower prices are possible near-term. If December extends this
week’s decline, the reaction low crossing at 23.38 is the next downside target. If
December renews 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 lower on Thursday as it extends this month’s decline. The low-
range close set the stage for a steady to lower opening on Friday. 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, the 62% retracement level of the
2010-2011 rally crossing at 18.79 is the next downside target. Closes above the 20-
day moving average crossing at 20.57 would confirm that a low has been posted.

December cotton closed higher due to short covering on Thursday but remains below
the 20-day moving average crossing at 73.17. The mid-range close sets the stage
for a steady opening on Friday. 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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