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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. 21

Feb 21, 2013

Thursday, February 21--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Traders are still digesting the Federal Reserve’s Open
Market Committee minutes from early January, which said U.S.
economic conditions are improving to the point that some
FOMC members think its massive asset purchasing program
(quantitative easing) may have to be changed soon. The FOMC
will further address the issue at its next meeting in March.
It can be argued, and many market analysts are saying, that
some markets over-reacted to the FOMC minutes. First, there
was not at all a consensus among the FOMC members on whether
to end the asset purchase program sooner rather than later.
And if the Fed does indeed target the unemployment rate for
its monetary policy decisions, the easy money policy of the
central bank likely won’t end any time soon. Fed Chairman
Bernanke also remains firmly in the dovish monetary policy
camp, most agree. European stocks and the Euro currency
slumped Thursday, following the lead of the U.S. markets
Wednesday afternoon. European stocks were also hurt by
disappointing Euro zone purchasing managers’ data from
Markit that was released Thursday. That data suggests the
Euro zone is still in overall economic contraction in the
first quarter. Asian stock markets were also weaker
Thursday, following the release of the U.S. FOMC minutes.
China’s stock market dropped sharply Thursday after Chinese
officials reiterated it wants to keep domestic property
prices in check—which could mean tighter monetary policy in
the near future. China’s central bank also made a large
withdrawal of cash from the banking system this week, in an
effort to keep price inflation in check. U.S. economic data
due for release Thursday includes the weekly jobless claims
report, the consumer price index, the flash manufacturing
PMI, existing home sales, leading economic indicators, the
weekly DOE liquid energy stocks report, and the Philadelphia
Fed business outlook survey.--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today on follow-
through selling from Wednesday. A weaker close today would
produce a bearish “key reversal” down on the daily bar
chart, which would be one clue that a market top is in
place. But right now the bulls still have the overall near-
term technical advantage. The shorter-term moving averages
(4-, 9- and 18-day) are neutral early today. The 4-day
moving average is below 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 the overnight high of
1,509.60 and then at 1,521.80. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at 1,500.00 and then at the February low of
1,490.50. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower in early trading as
the bulls are fading. Bulls do still have the overall near-
term technical advantage. The shorter-term moving averages
(4- 9-and 18-day) are neutral early today. The 4-day moving
average is below the 9-day. The 9-day average is above the
18-day. Short-term oscillators (RSI, slow stochastics) are
bearish early today. Shorter-term technical resistance is
located at the overnight high of 2,741.00 and then at
2,750.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at the February
low of 2,709.00 and then at 2,700.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 4.5

Dow futures: Prices are weaker today on profit taking after
hitting a five-year high on Wednesday. A weaker close today
would produce a bearish “key reversal” down on the daily bar
chart, which would be one clue that a market top is in
place. But right now the bulls still have the overall near-
term technical advantage. Sell stops likely reside just
below technical support at the February low of 13,805 and
then at 13,750. Buy stops likely reside just above technical
resistance at 14,000 and then at Wednesday’s high of 14,035.
Shorter-term moving averages are neutral early today, as the
4-day moving average is below the 9-day. The 9-day moving
average is above the 18-day moving average. Shorter-term
oscillators (RSI, slow stochastics) are bearish early today.
Wyckoff's Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today on short
covering in a bear market. Bears 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. The 9-day is above the 18-day
moving average. Oscillators (RSI, slow stochastics) are
bullish early today. Shorter-term resistance lies at the
overnight high of 143 27/32 and then at 144 even. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at 143 16/32 and then at the
overnight low of 143 3/32. Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 6.0

March U.S. T-Notes: Prices are higher early today on short
covering in a bear market. Bears 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 even with the 9-day. The 9-day is above the 18-
day moving average. Oscillators (RSI, slow stochastics) are
bullish early today. Shorter-term resistance lies at the
overnight high of 131.26.0 and then at the February high of
131.29.5. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
131.26.0 and then at 131.20.0. Sell stops likely reside
just below those levels. Wyckoff's Intra-Day Market Rating:
6.0

U.S. DOLLAR INDEX

The March U.S. dollar index is solidly higher early today
and hit a fresh three-month high. The greenback bulls are
showing solid power to suggest a market bottom is in place
and that prices can continue to trend higher in the near
term. Slow stochastics for the dollar index are bullish
early today. The dollar index finds shorter-term technical
resistance at the overnight high of 81.62 and then at the
November high of 81.70. Shorter-term support is seen at the
overnight low of 81.12 and then at 80.99. Wyckoff's Intra
Day Market Rating: 6.5

NYMEX CRUDE OIL

Crude oil prices are solidly lower early today and hit a
fresh six-week low overnight. Bulls are fading badly amid
the very strong U.S. dollar index. In April Nymex crude,
look for buy stops to reside just above resistance at $94.00
and then at $95.00. Look for sell stops just below technical
support at the overnight low of $93.52 and then at $93.00.
Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were mostly weaker overnight. The grain markets are
now feeling pressure from the overall selling seen in the
raw commodity market sector, with crude oil and gold
leading the downside price action. The strong resurgence in
the value of the U.S. dollar recently is also a bearish
factor for the grain futures markets.
 

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