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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Oct. 25

Oct 25, 2012

Thursday, Oct. 25--Jim Wyckoff's Morning Web Log

Note: I am out of the office today. My friend and fellow analyst/trader Ken Seehusen
is producing my morning report. Ken's style is a bit different than mine, but I think
you'll also benefit from Ken's work.--Jim

The STOCK INDEXES

The December NASDAQ 100 was higher due to short covering overnight as it
rebounds off the 50% retracement level of the June-September rally crossing
at 2657.00. 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 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 2739.82 are needed to
confirm that a short-term low has been posted. First resistance is the
10-day moving average crossing at 2703.97. Second resistance is the 20-day
moving average crossing at 2739.82. First support is the 50% retracement
level of the June-September rally crossing at 2757.37. Second support is the
62% retracement level of the June-September rally crossing at 2606.66.

The December S&P 500 index was higher due to short covering overnight as it
consolidates some of the decline off last Thursday’s high. The overnight
rebound was fueled by expectations that companies report earnings may show a
rebound in durable-goods orders and a fall in jobless claims. 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
38% retracement level of the June-July rally crossing at 1385.79 is the next
downside target. Closes above the 20-day moving average crossing at 1435.07
would temper the near-term bearish outlook. First resistance is the 20-day
moving average crossing at 1435.07. Second resistance is last Thursday’s
high crossing at 1459.50. First support is Wednesday’s low crossing at
1401.70. Second support is the 38% retracement level of the June-September
rally crossing at 1385.79.

INTEREST RATES

December T-bonds were lower overnight signaling that the short covering
rebound off last week’s low might have come to an end. At the same time
stochastics and the RSI are turning bullish hinting that a low might be in
or is near. Closes above the 20-day moving average crossing at 148-09 are
needed to confirm that a short-term low has been posted. If December renews
this month’s decline, August’s low crossing at 145-23 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
last Thursday’s low crossing at 146-05. Second support is August’s low
crossing at 145-23.

ENERGY MARKETS

December crude oil was higher due to short covering overnight as it
consolidates some of the decline off last Friday’s high. The overnight
rebound in crude oil was supported by speculation that this week’s losses
were excessive ahead of reports, which may show an improvement in the U.S.
economy. This week’s decline was the largest since May. However, stochastics
and the RSI 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
90.76 would confirm that a short-term low has been posted. First resistance
is the 20-day moving average crossing at 90.76. Second resistance is the
reaction high crossing at 94.02. First support is Wednesday’s low crossing
at 84.94. Second support is the 75% retracement level of the June-September
rally crossing at 84.64.

CURRENCIES

The December Dollar was lower overnight as it extends the trading range of
the past five weeks. Stochastics and the RSI are bullish signaling that
sideways to higher prices are possible near-term. If December extends this
week’s rally, this month’s high crossing at 80.31 is the next upside target.
Closes below last week’s low would open the door for a possible test of
September’s low crossing at 78.72 later this fall. First resistance is this
month’s 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.

GRAINS

This morning at 7:30 CT is the weekly export sales. The Dow Jones range of
analysts' estimates for soybean export sales is (22.046-33.069 million
bushels); corn export sales (5.905 14.763 million bushels); wheat export
sales (9.186-16.535 million bushels); soybean meal 150-250 tmt and soybean
oil 15-25 tmt.

December corn was higher overnight as it extends this month’s trading range.
Stochastics and the RSI are neutral to bearish signaling that sideways to
lower prices are possible near-term. If December renews the rally off
September’s low, the reaction high crossing at 7.89 1/2 is the next upside
target. Closes below the reaction low crossing at 7.32 1/4 would confirm
that a short-term top has been posted thereby opening the door for
additional weakness near-term. First resistance is the reaction high
crossing at 7.89 1/2. Second resistance is the reaction high crossing at
8.06 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 was fractionally lower overnight as it consolidated some of
Wednesday’s rally. The high-range close sets the stage for a steady to
higher opening when the day session begins trading. If December extends the
rally off last week’s low, minor resistance crossing at 8.94 then 9.07 are
the next upside targets. From a broad perspective, December wheat needs to
close above 9.53 1/4 or below 8.36 1/2 to confirm a breakout of the summer’s
trading range and point the direction of the next trending move. First
resistance is the reaction high crossing at 8.94. Second resistance is the
reaction high crossing at 9.07. First support is the reaction low crossing
at 8.40 1/4. Second support is the 38% retracement level of this summer’s
rally crossing at 8.29 1/2.

January soybeans were fractionally lower overnight as it consolidates some
of the rally off last week’s low. Stochastics and the RSI remain bullish
signaling that sideways to higher prices are possible near-term. If January
extends the aforementioned rebound, the 38% retracement level of the
September-October decline crossing at 15.97 3/4 is the next upside target.
Closes below the 10-day moving average crossing at 15.34 1/2 would temper
the near-term friendly outlook in the market. First resistance is the 38%
retracement level of the September-October decline crossing at 15.97 3/4.
Second resistance is the 50% retracement level of the September-October
decline crossing at 16.33. First support is the 10-day moving average
crossing at 15.34 1/2. Second support is last Monday’s low crossing at
14.84.


 

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