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RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Feb. 1

Feb 01, 2013

Friday, February 1--Jim Wyckoff's Morning Web Log

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

Overnight Developments

The market place is squarely focused on Friday morning’s U.S. employment
report for January. The key non-farm payrolls figure is forecast to come
in at up 165,000 versus up 155,000 the previous month. The unemployment
rate is forecast at 7.8%, which is unchanged from the previous month. A
stronger-than-expected U.S. jobs report would likely be bearish for the
gold and silver markets, while a weaker-than-expected report would
likely be bullish. Look for more volatile price action in many markets,
including gold and silver, in the immediate aftermath of Friday
morning’s U.S. jobs data. European stock markets traded firmer
overnight, supported by some upbeat manufacturing data coming out of the
European Union. The Markit data company reported its monthly purchasing
managers’ index at 47.9 in January versus 46.1 in December. Inflation in
the EU was reported Friday at 2% on an annualized basis, which is the
rate the European Central Bank is targeting. The EU collective
unemployment rate held steady in January, at 11.7%. Recent EU economic
data suggests the EU economy and the sovereign debt crisis have bottomed
out, even though much more heavy lifting is needed among EU countries in
the coming weeks and months, or longer. Asian stocks were also higher
Friday on ideas China’s economy continues on the upswing. U.S. economic
data due for release Friday includes the jobs report, the U.S.
manufacturing PMI, the University of Michigan consumer sentiment survey,
construction spending, the global manufacturing PMI, the ISM
manufacturing report, and domestic auto industry sales.--Jim

The STOCK INDEXES

The March NASDAQ 100 was higher overnight as it extends January’s
trading range above the 62% retracement level of the September-November
decline crossing at 2715.55. Stochastics and the RSI are bearish
signaling that sideways to lower prices are possible near-term. If March
renews the rally off the late-December low, the 87% retracement level of
the September-November decline crossing at crossing at 2804.15 is the
next upside target. Closes below the reaction low crossing at 2698.50
are needed to confirm a downside breakout of the aforementioned trading
range. First resistance is the 75% retracement level of the September-
November decline crossing at crossing at 2761.06. Second resistance is
the 87% retracement level of the September-November decline crossing at
2804.15. First support is the reaction low crossing at 2698.50. Second
support is the January 2nd gap crossing at 2665.00.

The March S&P 500 index was higher overnight as it consolidates some of
the decline of the past two days. Stochastics and the RSI are overbought
but are turning neutral to bearish hinting that a short-term top might
be in or is near. Closes below the 20-day moving average crossing at
1478.01 would confirm that a short-term top has been posted. If March
extends the rally off November’s low, weekly resistance crossing at
1526.50 is the next upside target. First resistance is Wednesday’s high
crossing at 1505.90. Second resistance is weekly resistance crossing at
1526.50. First support is the 10-day moving average crossing at 1493.36.
Second support is the 20-day moving average crossing at 1478.01.

INTEREST RATES

March T-bonds was lower overnight and remains poised to extend January’s
decline. Stochastics and the RSI are oversold but remain neutral to
bearish signaling that sideways to lower prices are possible near-term.
If March extends this winter’s decline, weekly support crossing at 139-
14 is the next downside target. Closes above the 20-day moving average
crossing at 144-28 are needed to confirm that a short-term low has been
posted. First resistance is the 20-day moving average crossing at 144-
28. Second resistance is the reaction high crossing at 146-17. First
support is Wednesday’s low crossing at 142-19. Second support is weekly
support crossing at 139-14.

ENERGY MARKETS

March crude oil was lower overnight as it consolidates some of this
winter’s rally. Stochastics and the RSI are overbought but remain
neutral to bullish signaling that sideways to higher prices are possible
near-term. If March extends the rally off December’s low, the 87%
retracement level of the September-November decline crossing at 99.78 is
the next upside target. Closes below the 20-day moving average crossing
at 95.40 are needed to confirm that a short-term top has been posted.
First resistance is Wednesday ’s high crossing at 98.24. Second
resistance is the 87% retracement level of the September-November
decline crossing at 99.78. First support is the 10-day moving average
crossing at 96.65. Second support is the 20-day moving average crossing
at 95.40.

CURRENCIES

The March Dollar was lower overnight and trading below December’s low
crossing at 79.01 as it extends this week’s decline. Stochastics and the
RSI remain bearish signaling that sideways to lower prices are possible
near-term. If March extends January’s decline, September’s low crossing
at 78.94 is the next downside target. Closes above the 20-day moving
average crossing at 79.85 are needed to confirm that a short-term low
has been posted. First resistance is the 10-day moving average crossing
at 79.70. Second resistance is the 20-day moving average crossing at
79.85. First support is the overnight low crossing at 78.97. Second
support is September’s low crossing at 78.94.

GRAINS

March corn was higher in overnight trading and trading above the 38%
retracement level of the August-January decline crossing at 7.42. The
high-range close sets the stage for a steady to higher opening when the
day session begins trading. Stochastics and the RSI are overbought but
remain bullish signaling that sideways to higher prices are possible
near-term. If March extends the rally off January’s low, the 50%
retracement level of the August-January decline crossing at 7.61 3/4 is
the next upside target. Closes below the 20-day moving average crossing
at 7.18 1/2 would confirm that a short-term top has been posted. First
resistance is the overnight high crossing at 7.44 3/4. Second resistance
is the 50% retracement level of the August-January decline crossing at
7.61 3/4. First support is the 20-day moving average crossing at 7.18
1/2. Second support is the reaction low crossing at 6.86 1/4.

March wheat was higher overnight and the high-range close sets the stage
for a steady to higher opening when the day session begins trading.
Stochastics and the RSI are neutral to bullish signaling that sideways
to higher prices are possible near-term. If March extends the rally off
this month’s low, the 38% retracement level of the November-January
decline crossing at 8.10 1/2 is the next upside target. Closes below the
20-day moving average crossing at 7.70 1/4 would confirm that a short-
term top has been posted. First resistance is the 38% retracement level
of the November-January decline crossing at 8.10 1/2. Second resistance
is the 50% retracement level of the November-January decline crossing at
8.33 1/4. First support is the 20-day moving average crossing at 7.70
1/4. Second support is January’s low crossing at 7.36 1/4.

March soybeans were higher overnight and poised to extend the rally off
January’s low. The high-range close sets the stage for steady to higher
prices when the day session begins trading later this morning.
Stochastics and the RSI are overbought but remain neutral to bullish
signaling that sideways to higher prices are possible near-term. If
March extends the aforementioned rally, the 38% retracement level of the
September-January decline crossing at 14.95 1/4 is the next upside
target. Closes below the 20-day moving average crossing at 14.25 would
confirm that a short-term top has been posted. First resistance is
Thursday’s high crossing at 14.84 1/4. Second resistance is the 38%
retracement level of the September-January decline crossing at 14.95
1/4. First support the 20-day moving average crossing at 14.25. Second
support is January’s low crossing at 13.51 1/2.

 

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