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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Afternoon Markets Report--July 25

Jul 26, 2012

Wednesday Evening, July 25-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 this week, spending some time with my wife in
Telluride, Colorado. My friend and fellow trader/analyst Ken Seehusen will produce
my daily report this week. 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 September NASDAQ 100 closed lower on Wednesday as it extended the
decline off last Thursday’s high. A rally in banking stocks along with a
turnaround in the Euro helped to temper some of today’s losses. The
mid-range close sets the stage for a steady to higher opening when Thursday’
s night session begins trading. Multiple closes below the aforementioned
uptrend line would confirm an end to the rally off June’s low while opening
the door for sideways to lower prices near-term. Stochastics and the RSI are
bearish signaling that sideways to lower prices are possible near-term.
Closes above the 20-day moving average crossing at 2689.48 are needed to
temper the near-term bearish outlook. First resistance is the 20-day moving
average crossing at 2689.48. Second resistance is last Thursday’s high
crossing at 2658.00. First support is the June-July uptrend line crossing
near 2548.16. Second support is the reaction low crossing at 2516.50.

The September S&P 500 index closed higher due to short covering on Wednesday
as it consolidated some of the decline off last week’s high. Despite today’s
short covering rally, September remains below broken support marked by the
June-July uptrend line crossing near 1339.85. 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 bearish signaling that sideways to
lower prices are possible near-term. If September extends the decline off
last week’s high, the reaction low crossing at 1320.00 is the next downside
target. Closes above the 10-day moving average crossing at 1349.52 would
confirm that a short-term low has been posted. First resistance is the
10-day moving average crossing at 1349.52. Second resistance is last
Thursday’s high crossing at 1375.70. First support is today’s low crossing
at 1321.30. Second support is the reaction low crossing at 1320.00.

The Dow closed higher due to short covering on Wednesday and above the
June-July uptrend line crossing near 12,640 as it consolidated some of the
decline off last week’s high. Today’s mid-range close sets the stage for a
steady to higher opening on Thursday. Multiple closes below the June-July
uptrend line crossing near 12,640 are needed to confirm that a trend change
is taking place while opening the door for a test of the reaction low
crossing at 12,492. Stochastics and the RSI remain bearish signaling that
sideways to lower prices are possible near-term. Closes above the 20-day
moving average crossing at 12,760 would temper the near-term bearish
outlook. First resistance is the 20-day moving average crossing at 12,760.
Second resistance is last Thursday’s high crossing at 12,977. First support
is Tuesday’s low crossing at 12,521. Second support is the reaction low
crossing at 12,492.

INTEREST RATES

September T-bonds closed up 4/32’s at 153-00.

September T-bonds closed higher on Wednesday as it extends Tuesday’s
breakout above broken resistance marked by June’s high of 152-19. The
high-range close sets the stage for a steady to higher opening on Thursday.
Stochastics and the RSI are diverging but are bullish signaling that
sideways to higher prices are possible near-term. Multiple closes above June’s high
crossing at 152-19 would confirm Tuesday’s upside breakout of this
resistance level while opening the door for additional gains into
early-August. Closes below the 20-day moving average crossing at 150-22 are
needed to confirm that a double top has been posted. First resistance is
today’s high crossing at 153-11. First support is the 20-day moving average
crossing at 150-22. Second support is the reaction low crossing at 147-23.

ENERGY MARKETS

September crude oil closed higher due to short covering on Wednesday, which
was triggered by today’s rebound in the equity markets. Despite today’s
rally, September remained below broken support marked by the 10-day moving
average, which crosses at 89.27. The high-range close sets the stage for a
steady to higher opening when Thursday’s night session begins. 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 86.91 would
confirm that a short-term top has been posted. If September renews the rally
off June’s low, the 50% retracement level of this year’s decline crossing at
94.28 is the next upside target. First resistance is last Thursday’s high
crossing at 93.25. Second resistance is the 50% retracement level of this
year’s decline crossing at 94.28. First support is the 20-day moving average
crossing at 86.91. Second support is the reaction low crossing at 84.05.

September heating oil closed higher due to short covering on Wednesday as it
consolidated some of the decline off last week’s high. The high-range close
sets the stage for a steady to higher opening when Thursday’s 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 277.30 would confirm that a short-term top has been posted. If
September renews the rally off June’s low, the 62% retracement level of the
March-June decline crossing at 302.08 is the next upside target. First
resistance is the 62% retracement level of the March-June decline crossing
at 302.08. Second resistance is the 75% retracement level of the March-June
decline crossing at 312.86. First support is the 20-day moving average
crossing at 277.30. Second support is the reaction low crossing at 270.38.

September unleaded gas closed lower on Wednesday as it extended Tuesday’s
decline below the 10-day moving average crossing at 274.87 signaling that a
short-term top is in or is near. A short covering rally tempered early
session losses and the high-range close sets the stage for a steady to
higher opening when Thursday’s night session begins trading. Stochastics and
the RSI have turned bearish signaling that sideways to lower prices are
possible near-term. Closes below the 20-day moving average crossing at
266.04 are needed to confirm that a short-term top has been posted. If
September renews the rally off June’s low, the 62% retracement level of the
March-June decline crossing at 288.72 is the next upside target. First
resistance is the 62% retracement level of the March-June decline crossing
at 288.72. Second resistance is the 75% retracement level of the March-June
decline crossing at 299.72. First support is the 20-day moving average
crossing at 266.04. Second support is the reaction low crossing at 259.39.

September Henry natural gas closed lower due to profit taking on Wednesday
as it consolidated some of the rally off June’s low. The low-range close
sets the stage for a steady to lower opening on Thursday. Stochastics and
the RSI are overbought but remain bullish signaling that sideways to higher
prices are possible near-term. If September extends the rally off June’s
low, the 38% retracement level of the 2011-2012-decline crossing at 3.352 is
the next upside target. Closes below the 20-day moving average crossing at
2.897 are needed to confirm that a short-term top has been posted. First
resistance is Tuesday’s high crossing at 3.186. Second resistance is the 38%
retracement level of the 2011-2012-decline crossing at 3.352. First support
is the 10-day moving average crossing at 2.966. Second support is the 20-day
moving average crossing at 2.897.

CURRENCIES

The September Dollar closed lower due to profit taking on Wednesday as it
consolidates some of the rally off last week’s low. The low-range close sets
the stage for a steady to lower opening on Thursday. Stochastics and the RSI
are diverging but are neutral to bullish signaling that sideways to higher
prices are possible near-term. If September extends the rally off May’s low,
weekly resistance crossing at 85.04 is the next upside target. Closes below
last Thursday’s low crossing at 82.80 would confirm that a short-term top
has been posted. First resistance is Tuesday’s high crossing at 84.24.
Second resistance is weekly resistance crossing at 85.04. First support is
last Thursday’s low crossing at 82.80. Second support is the reaction low
crossing at 81.56.

The September Euro closed higher due to short covering on Wednesday as it
consolidated some of its recent losses. The high-range close sets the stage
for a steady to higher opening on Thursday. Stochastics and the RSI are
oversold, diverging but remain neutral to bearish signaling that additional
weakness is possible near-term. If September extends this year’s decline,
monthly support crossing at 118.74 is the next downside target. Closes above
the 20-day moving average crossing at 123.20 would confirm that a low has
been posted. First resistance is the 20-day moving average crossing at
123.20. Second resistance is last Thursday’s high crossing at 123.35. First
support is Tuesday’s low crossing at 120.51. Second support is monthly
support crossing at 118.74.

The September British Pound closed lower on Wednesday as it extended the
decline off last Thursday’s high. 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. If September extends the aforementioned decline, the
reaction low crossing at 1.5390 is the next downside target. If September
renews the rally off July’s low, June’s high crossing at 1.5773 is the next
upside target. First resistance is last Thursday’s high crossing at 1.5736.
Second resistance is June’s high crossing at 1.5773. First support is the
reaction low crossing at 1.5390. Second support is June’s low crossing at
1.5266.

The September Swiss Franc closed higher due to short covering on Wednesday
as it consolidates some of this year’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 diverging but remain neutral to
bearish signaling that sideways to lower prices are possible near-term. If
September extends this year’s decline, monthly support crossing at .9939 is
the next downside target. Closes above the 20-day moving average crossing at
crossing at .10266 are needed to confirm that a short-term low has been
posted. First resistance is the 20-day moving average crossing at .10266.
Second resistance is last Thursday’s high crossing at crossing at .10274.
First support is Tuesday’s low crossing at .10040. Second support is monthly
support crossing at .9939.

The September Canadian Dollar closed higher due to short covering on
Wednesday as it consolidated some of the decline off last week’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 remain bearish
signaling that sideways to lower prices are possible near-term. If September
extends the decline off last week’s high, the reaction low crossing at 97.40
is the next downside target. If September renews the rally off June’s low,
the 62% retracement level of the April-June decline crossing at 99.33 is the
next upside target. First resistance is last Thursday’s high crossing at
99.21. Second resistance is the 62% retracement level of this spring’s
decline crossing at 99.33. First support is the reaction low crossing at
97.40. Second support is June’s uptrend line crossing near 97.09.

The September Japanese Yen closed higher on Wednesday as it extends the
rally off June’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 overbought but remain neutral to bullish signaling that sideways
to higher prices are possible near-term. If September extends this month’s
rally, June’s high crossing at .12895 is the next upside target. Closes
below the 20-day moving average crossing at .12640 would confirm that a
short-term top has been posted. First resistance is Monday’s high crossing
at .12839. Second resistance is June’s high crossing at .12895. First
support is the 20-day moving average crossing at .12640. Second support is
the reaction low crossing at .12514.

PRECIOUS METALS

October gold closed sharply higher on Wednesday and above the reaction high
crossing at 1600.10 signaling that a short-term low has been posted. 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 turning neutral
to bullish signaling that sideways to higher prices are possible near-term.
If October gold extends today’s rally, the reaction high crossing at 1626.90
is the next upside target. Closes below the reaction low crossing at 1550.00
would open the door for a possible test of May’s low crossing at 1534.30.
First resistance is the reaction high crossing at 1626.90. Second resistance
is the reaction high crossing at 1644.00. First support is the reaction low
crossing at 1550.00. Second support is May’s low crossing at 1534.30.

September silver closed higher on Wednesday while extending this month’s
trading range. The high-range close set the stage for a steady to higher
opening when Thursday’s night session begins trading. Stochastics and the
RSI are neutral to bearish signaling that sideways to lower prices are
possible near-term. If September extends this month’s decline, June’s low
crossing at 26.105 is the next downside target. If September renews the
rally off June’s low, June’s high crossing at 29.915 is the next upside
target. First resistance is the reaction high crossing at 29.135. Second
resistance is June’s high crossing at 29.915. First support is June’s low
crossing at 26.105. Second support is weekly support crossing at 24.689.

September copper closed higher due to short covering on Wednesday as it
consolidates some of the decline off last Thursday’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 remain bearish signaling
that sideways to lower prices are possible near-term. If September extends
this week’s decline, June’s low crossing at 325.00 is the next downside
target. Closes above the 10-day moving average crossing at 344.34 would
temper the near-term bearish outlook in September copper. First resistance
is the 10-day moving average crossing at 344.34. Second resistance is this
month’s high crossing at 355.65. First support is the reaction low crossing
at 326.50. Second support is June’s low crossing at 325.00.

GRAINS

December Corn closed up 9 3/4-cents at 7.88.

December corn closed higher on Wednesday as it extended the late-day rebound
off Tuesday’s low. This summer’s rally has staled below key resistance
crossing at 7.99 3/4 as traders are trying to access whether or not this
summer’s rally has gone high enough to ration demand. 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 overbought but remain neutral to
bullish signaling that sideways to higher prices are possible near-term.
Closes above the previous all-time high of $7.99-3/4 would likely trigger
additional buying as the door would be open for additional gains into early
August. Initial support is Tuesday’s low crossing at 7.45 1/2. Closes below
the 20-day moving average crossing at 7.25 1/2 are needed to confirm that a
short-term top has been posted. First resistance is Monday’s high crossing
at 8.00. First support is Tuesday’s low crossing at 7.45 1/2. Second support
is the 20-day moving average crossing at 7.25 1/2.

December wheat closed up 26 3/4-cents at 9.15.

December wheat closed higher on Wednesday as today’s rally was fueled by
rumors that Russia could ban exports due to mounting production losses. 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 turning bearish
signaling that a pause or setback to consolidate some of this summer’s rally
is possible. Closes below the 20-day moving average crossing at 8.57 would
confirm that a short-term top has been posted while opening additional
weakness possible into early August. If December renews the rally off June’s
low, the May-2011 high crossing at 9.77 1/2 is the next upside target. First
resistance is Monday’s high crossing at 9.53 1/4. Second resistance is the
May-2011 high crossing at 9.77 1/2. First support is the 20-day moving
average crossing at 8.57. Second support is the reaction low crossing at
8.16 1/4.

December Kansas City Wheat closed up 24 3/4-cents at 9.22 3/4.

December Kansas City wheat gapped up and closed higher on Wednesday as it
consolidated some of the decline off last week’s high. The high-range close
sets the stage for a steady to higher opening on Thursday. Stochastics and
the RSI are turning bearish hinting that sideways to lower prices are
possible near-term. Closes below the 20-day moving average crossing at 8.66
1/2 would confirm that a short-term top has been posted. If December renews
this summer’s rally, the May-2011 high crossing at 9.78 1/2 is the next
upside target. First resistance is last Friday’s high crossing at 9.54.
Second resistance is the May-2011 high crossing at 9.78 1/2. First support
is Tuesday’s low crossing at 8.75 3/4. Second support is the 20-day moving
average crossing at 8.66 1/2.

December Minneapolis wheat closed up 20 1/2-cents at 9.89.

December Minneapolis wheat posted an inside day with a higher close on
Wednesday as it consolidated some of this week’s losses. 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 have turned bearish
signaling that sideways to lower prices are possible near-term. Closes below
the 20-day moving average crossing at 9.37 1/4 are needed to confirm that a
top has been posted. If December extends this summer’s rally, weekly
resistance crossing at 10.70 3/4 is the next upside target. First resistance
is Monday’s high crossing at 10.34. Second resistance is weekly resistance
crossing at 10 70 3/4. First support is the 20-day moving average crossing
at 9.37 1/4. Second support is the reaction low crossing at 8.99 1/4.

SOYBEAN COMPLEX

November soybeans closed up 46-cents at 16.15 1/2.

November soybeans closed sharply higher on Wednesday, as there is a growing
sentiment that this week's rains will fall short of reversing crop loss
trends. Additional gains on Thursday are needed to confirm that this week's
losses were merely a correction within this summer’s bull market. Today’s
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
signaling that sideways to lower prices are possible near-term. Closes below
the 20-day moving average crossing at 15.41 1/4 would confirm that a
short-term top has been posted while opening the door for a possible decline
to this summer’s uptrend line crossing near 14.94. If November renews this
summer’s rally, psychological resistance crossing at 17.00 is the next
upside target. First resistance is Monday’s high crossing at 16.91 1/2.
Second resistance is psychological resistance crossing at 17.00. First
support is the 20-day moving average crossing at 15.41 1/4. Second support
is this summer’s uptrend line crossing near 14.94.

December soybean meal closed up $13.40 at $483.20.

December soybean meal closed sharply higher due to short covering on
Wednesday and filled Tuesday’s gap crossing at 484.30. The high-range close
sets the stage for a steady to higher opening when Thursday’s night session
begins trading. Stochastics and the RSI have turned bearish warning bulls
that additional weakness is possible near-term. Closes below the 20-day
moving average crossing at 452.40 would confirm that a short-term top has
been posted. If December renews this year’s rally into uncharted territory,
upside targets will be hard to project. First resistance is Monday’s high
crossing at 509.80. First support is the 20-day moving average crossing at
452.40. Second support is the reaction low crossing at 433.00.

December soybean oil closed up 67-pts. at 53.00.

December soybean posted an inside day with a higher close on Wednesday as it
consolidated some of Tuesday’s decline but remains well below broken support
marked by the 20-day moving average crossing at 54.14. 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 bearish signaling that
additional weakness is possible near-term. Closes above the 10-day moving
average crossing at 54.43 are needed to temper the near-term bearish
outlook. First resistance is the 20-day moving average crossing at 54.14.
Second resistance is the 10-day moving average crossing at 54.43. First
support is Tuesday’s low crossing at 52.12. Second support is the reaction
low crossing at 51.36.

LIVESTOCK

August hogs closed up $1.62 at $94.55.

August hogs gapped up and closed higher on Wednesday renewing 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 August extends the rally off lat week’s low, July’s high
crossing at 96.15 is the next upside target. Closes below the 10-day moving
average crossing at 92.32 would temper the near-term friendly outlook. First
resistance is today’s high crossing at 94.75. Second resistance is this
month’s high crossing at 96.15. First support is the 10-day moving average
crossing at 92.32. Second support is last Monday’s low crossing at 89.75.

August cattle closed down $0.85 at 117.95.

August cattle closed lower due to profit taking on Wednesday. The mid-range
close sets the stage for a steady 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 August renews last week
’s rally, the reaction high crossing at 120.55 is the next upside target. If
August renews this month’s decline, April’s low crossing at 114.70 is the
next downside target. First resistance is last Thursday’s high crossing at
119.10. Second resistance is the reaction high crossing at 120.55. First
support is last Tuesday’s low crossing at 115.45. Second support is April’s
low crossing at 114.70.

August feeder cattle closed down $3.00 at $134.67.

August Feeder cattle closed limit down on Wednesday while extending the
trading range of the past five days. The limit down close sets the stage for
a steady to lower opening when Thursday’s night session begins trading.
Stochastics and the RSI are neutral to bullish signaling that sideways to
higher prices are possible near-term. Closes above the 20-day moving average
crossing at 142.14 would confirm that a short-term low has been posted. If
August renews this summer’s decline, weekly support crossing at 132.66 is
the next downside target. First resistance is the 10-day moving average
crossing at 137.08. Second resistance is the 20-day moving average crossing
at 142.14. First support is last Tuesday’s low crossing at 133.10. Second
support is weekly support crossing at 132.66.

FOOD & FIBER

September coffee close slightly higher due to short covering on Wednesday as
it consolidated some of Tuesday’s decline but remains below the 20-day
moving average crossing at 17.95. The mid-range close sets the stage for a
steady opening on Thursday. Stochastics and the RSI are bearish signaling
that additional weakness is possible. If September extends Tuesday’s
decline, the reaction low crossing at 16.08 is the next downside target. If
September renews the rally off June’s low, April’s high crossing at 19.55 is
the next upside target.

September cocoa closed higher on Wednesday and the mid-range close sets the
stage for a steady opening on Thursday. Stochastics and the RSI are turning
neutral to bullish signaling that sideways to higher prices are possible
near-term. Closes above the last Thursday’s high crossing at 22.85 would
temper the near-term bearish outlook. If September renews this month’s
decline, the reaction low crossing at 20.85 is the next downside target.

October sugar closed higher on Wednesday and the high-range close set the
stage for a steady to higher opening on Thursday. Stochastics and the RSI
are overbought but remain neutral to bullish signaling that sideways to
higher prices are possible near-term. If October extends the rally off June’
s low, February’s high crossing at 24.69 is the next upside target. Closes
below the 20-day moving average crossing at 22.49 would confirm that a
short-term top has been posted.

October cotton closed sharply lower on Wednesday while extending this month’
s trading range. 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 October extends today’s
decline, the reaction low crossing at 66.70 is the next downside target.
From a broad perspective October needs to close above 75.00 or below 65.00
are needed to confirm a breakout of June’s trading range and point the
direction of the next trending move.

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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