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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Dec. 13

Dec 13, 2012

Thursday, December 13--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Attention of the market place has shifted to once again
focus on the “fiscal cliff” tax increases and spending cuts
that is fast approaching. There is no apparent movement from
either side on the matter, just more rhetoric from the
politicians. The market is a bit more on edge Thursday after
Fed Chairman Bernanke on Wednesday warned that the U.S. Fed
could do little to repair the damage from the politicians
failing to come to agreement and the government going over
the fiscal cliff. The market place had been reckoning odds
were a bit higher than not that there would be a last-minute
agreement among U.S. lawmakers to avoid the fiscal cliff.
However, the lack of progress between the Obama
administration and Congress as the year winds down is making
traders very skittish. The overall situation continues to be
a bearish drag on many markets, including the raw
commodities and stock markets. The market place is still
digesting the U.S. Federal Reserve decision Wednesday to end
its “Operation Twist” program but extend its long-bond-
buying program to the tune of $45 billion a month. That news
is what many had figured the central bank would do. The new
plan would expand the Fed’s balance sheet and ostensibly
print greenbacks. The FOMC also said it will begin tying
interest rate policy to the U.S. unemployment rate, saying
as long as unemployment is above 6.5%, rates will not rise.
Some quick math on that matter suggests the Fed will not be
raising interest rates for at least three more years.
Wednesday’s Federal Reserve developments are a bullish
underlying fundamental factor for the raw commodity markets.
In overnight news, European Union finance officials have
agreed on a deal that would create a single bank supervisor
and EU banking union. This is a big, positive step for the
EU in its three-year-old sovereign debt crisis. The news
lifted the Euro currency and lowered Spanish and Italian
bond yields. The agreement still needs to be ratified by the
European Parliament. Also Thursday Greece was approved to
get a fresh tranche of EU bailout money. All in all Thursday
was a very positive day in the European Union’s efforts at
fixing its financial and economic problems. However, much
more heavy lifting needs to occur in the coming months for
the EU to continue on a path of recovery.--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early trading
today. Bulls still have near-term momentum on their side.
Prices are in a four-week-old uptrend on the daily bar
chart. The shorter-term moving averages (4-, 9- and 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.
Short-term oscillators (RSI, slow stochastics) are bearish
early today. Today, shorter-term technical resistance comes
in at this week’s high of 1,433.00 and then at 1,450.00. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at Wednesday’s
low of 1,415.40 and then at last week’s low of 1,397.00.
Sell stops are likely located just below those levels.
Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early today.
The shorter-term moving averages (4- 9-and 18-day) are
bullish early today. The 4-day moving average is above the
9-day. The 9-day average is above the 18-day. Short-term
oscillators (RSI, slow stochastics) are neutral early today.
Shorter-term technical resistance is located at 2,675.00 and
then at 2,700.00. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the
overnight low of 2,661.00 and then at this week’s low of
2,644.25. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 5.0

Dow futures: Prices are near steady early today. Prices are
still in a four-week-old uptrend as bulls have some near-
term momentum. Sell stops likely reside just below technical
support at 13,100 and then at 13,050. Buy stops likely
reside just above technical resistance at 13,200 and then at
Wednesday’s high of 13,240. 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 to bearish early today. Wyckoff's
Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today and
hit a fresh five-week low overnight. Bulls are fading and
need to show fresh power soon. Oddly, the FOMC news
Wednesday should have been bullish the bond market, but
traders took a “buy the rumor, sell the fact” attitude on
the matter. Shorter-term moving averages (4- 9- 18-day) are
bearish early today. The 4-day moving average is below the
9-day and 18-day. The 9-day is below the 18-day moving
average. Oscillators (RSI, slow stochastics) are neutral to
bearish early today. Shorter-term resistance lies at the
overnight high of 148 10/32 and then at 148 16/32. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 147 21/32 and
then at 147 16/32. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are near steady early today and
hit another fresh two-week low. Bulls are fading but still
have the 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 to bearish
early today. Shorter-term resistance lies at the overnight
high of 133.05.5 and then at 133.16.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 132.28.0 and then at
132.25.0. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is firmer in early U.S. trading
today, on a corrective bounce from recent selling pressure.
Bulls have faded recently. Slow stochastics for the dollar
index are bearish early today. The dollar index finds
shorter-term technical resistance at Wednesday’s high of
80.23 and then at Tuesday’s high of 80.50. Shorter-term
support is seen at the overnight low of 79.87 and then at
79.78. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bears still have
the slight overall near-term technical advantage. In January
Nymex crude, look for buy stops to reside just above
resistance at the overnight high of $86.78 and then at
Wednesday’s high of $87.68. Look for sell stops just below
technical support at this week’s low of $85.21 and then at
$85.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed to lower in overnight trading. The grain
market bulls are fading this week, with wheat bears gaining
downside technical momentum. Wheat futures this week have
seen a bearish downside “breakout” from a well-established
trading range on the daily bar chart. The wheat market’s
price action this week is worrisome for the entire grain
futures complex. If wheat prices continue to erode, there
is likely to be spillover selling pressure enter the corn
and soybean markets and at least limit their upside
potential.


 

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