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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. 26

Feb 26, 2013

Tuesday, February 26--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The European Union and its sovereign debt problems are back
on the front burner of the market place, again, after a few
months’ hiatus. Italian elections that just concluded and
failed to show a clear winner indicated voters ostensibly
rebuked present government austerity measures meant to
repair Italy’s damaged economic and financial structure. It
also suggests political instability in Italy in the coming
months. The Italian vote left the market place wondering
when the next shoe will fall in the EU debt crisis that
remains a serious matter in the world market place. Flight-
to-safety buying of U.S. Treasuries, German bunds, gold and
the U.S. dollar all quickly came back into vogue late
Monday. Meantime, risk assets such as world stock markets
and many commodity markets, and the Euro currency, were
pressured on the Italian vote news. Other than the safe-
haven German bunds, European bond yields were on the rise as
fears of an EU debt contagion are again surfacing. There are
Italian government debt auctions Tuesday and Wednesday that
will be very closely scrutinized by the market place. The
U.S. government’s likely inability to agree on a taxing and
spending plan by the March 1 sequestration deadline is added
to a nervous and uncertain atmosphere in the world market
place this week. Traders and investors are awaiting the
Tuesday and Wednesday testimony on the U.S. economy to
Congress from Federal Reserve Chairman Ben Bernanke. Traders
and investors will be looking for fresh clues on the
direction of U.S. monetary policy in the coming weeks and
months. In Asia, the Japanese stock market fell as the yen
rallied on safe-haven investor demand due to the resurfacing
of the EU debt crisis. The yen had been on a steady decline
for the past four months, but made an abrupt about-face on
Monday afternoon. U.S. economic data due for release Tuesday
includes the weekly Goldman Sachs and Johnson Redbook retail
sales indexes, the S&P/Case-Shiller home price index, the
monthly and quarterly house price indexes, the consumer
confidence index, new residential sales, and the Richmond
Fed business survey.—Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today on a
corrective bounce from strong selling pressure Monday.
The bulls still have the overall near-term technical
advantage but did fade Monday. The shorter-term moving
averages (4-, 9- and 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. Short-term oscillators
(RSI, slow stochastics) are neutral early today. Today,
shorter-term technical resistance comes in at 1,500.00 and
then at 1,515.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at Monday’s low of 1,482.00 and then at 1,475.00. Sell stops
are likely located just below those levels. Wyckoff's Intra-
day Market Rating: 5.5

Nasdaq index futures: Prices are firmer in early trading on
a corrective bounce from solid losses Monday. Bulls still
have the overall near-term technical advantage but did fade
on Monday. The shorter-term moving averages (4- 9-and 18-
day) are bearish early today. The 4-day moving average is
below the 9-day and 18-day. The 9-day average is below the
18-day. Short-term oscillators (RSI, slow stochastics) are
neutral early today. Shorter-term technical resistance is
located at 2,725.00 and then at 2,750.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at Monday’s low of 2,691.75 and then at
2,675.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5

Dow futures: Prices are firmer today and seeing a corrective
bounce from strong losses on Monday that did produce a
bearish “key reversal” down on the daily bar chart, which
does suggest a market top is now in place. The bulls still
have the overall near-term technical advantage, but did fade
Monday. Sell stops likely reside just below technical
support at Monday’s low of 13,770 and then at 13,750. Buy
stops likely reside just above technical resistance at
13,850 and then at 13,900. Shorter-term moving averages are
neutral early today, as the 4-day moving average is below
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 bearish early today. Wyckoff's Intra-Day
Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today and hit a
fresh five-week high on safe-haven demand. Bulls have
quickly gained upside momentum amid a resurfacing of the EU
debt crisis. Shorter-term moving averages (4- 9- 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.
Oscillators (RSI, slow stochastics) are bullish early today.
Shorter-term resistance lies at the overnight high of 144
26/32 and then at 144 30/32. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 143 30/32 and then at 143 16/32. 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 and hit a
fresh two-month high overnight, on safe-haven buying. Bulls
have quickly gained upside momentum. Shorter-term moving
averages (4- 9- 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. Oscillators (RSI, slow stochastics)
are bullish early today. Shorter-term resistance lies at
the overnight high of 131.26.0 and then at 132.00.0. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 131.12.5 and
then at 131.08.0. 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 near steady early today on
profit taking after hitting a six-month high Monday. The
greenback bulls have shown solid power recently and are this
week seeing fresh safe-haven demand due to the EU debt
crisis. Slow stochastics for the dollar index are bearish
early today. The dollar index finds shorter-term technical
resistance at Monday’s high of 82.19 and then at 82.50.
Shorter-term support is seen at 81.81 and then at 81.50.
Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are lower early today and hit a fresh two-
month low overnight. The stronger U.S. dollar and risk
aversion are pressuring crude this week. In April Nymex
crude, look for buy stops to reside just above resistance at
the overnight high of $92.65 and then at $93.00. Look for
sell stops just below technical support at the overnight low
of $91.92 and then at $91.50. Wyckoff's Intra-Day Market
Rating: 4.0

GRAINS

Markets were mixed overnight. The grain markets have been
feeling pressure from the overall selling seen in the raw
commodity market sector, with crude oil leading the
downside price action. The risk-averse attitudes now in the
market place, due to the resurfacing of the EU debt crisis,
are another bearish element for the grains. There have also
better moisture patterns in the central U.S. that are
working to alleviate the severe soil shortages in the
region. My bias is that there is still some near-term price
pressure to come in the grains, but I am not longer-term
bearish.
 

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