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Pro Farmer Tech Talk

RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

JIm's Morning Markets Report--July 23

Jul 23, 2012

Monday, July 23--Jim Wyckoff's Morning Web Log

Note: I am out of the office this week, vacationing in beautiful
Telluride, Colorado. My friend and fellow analyst/trader Ken Seehusen
produced my morning reports. 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 September NASDAQ 100 was sharply lower overnight over increased
concerns that that Greece won’t fulfill its bailout commitments and a
Chinese policy maker warned of cooling growth. Stochastics and the
RSI are diverging and are turning neutral to bearish hinting that a
short-term top might be in or is near. If September extends the rally
off June’s low, the May 4th gap crossing at 2686.50 is the next
upside target. Closes below the 20-day moving average crossing at
2588.25 would confirm that a short-term top has been posted. Closes
below the June-July uptrend line crossing near 2542.24 would confirm
that the uptrend off June’s low has ended while opening the door for
additional weakness near-term. First resistance is last Thursday’s
high crossing at 2658.00. Second resistance is the May 4th gap
crossing at 2686.50. First support is the 20-day moving average
crossing at 2588.25. Second support is the June-July uptrend line
crossing near 2542.24.

The September S&P 500 index gapped down and was sharply lower
overnight over Greek debt concerns and warnings of a slowdown in
China’s economy. Stochastics and the RSI are diverging and are
turning neutral to bearish warning bulls to use caution as the rally
off June’s low might be coming to an end. Closes below the 20-day
moving average crossing at 1345.75 would confirm that a double top
with the early-July high has been posted. Closes below the June-July
uptrend line crossing near 1335.96 would confirm that the uptrend off
June’s low has ended while opening the door for a larger-degree
decline into the end of July. If September extends the rally off
June’s low, May’s high crossing at 1395.50 is the next upside target.
First resistance is last Thursday’s high crossing at 1375.70. Second
resistance is May’s high crossing at 1395.50. First support is the
20-day moving average crossing at 1345.75. Second support is the
June-July uptrend line crossing near 1335.96.

INTEREST RATES

September T-bonds were higher overnight in a flight-to-quality move
on the part of investors over Greece’s debt concern and a warning by
China of a slowdown in their economy. The overnight rally saw
September push above June’s high into uncharted territory to renew
this year’s rally. Stochastics and the RSI are diverging but turning
neutral to bullish signaling that sideways to higher prices are
possible near-term. If September extends this year’s rally into
uncharted territory, upside targets will now be hard to project.
Closes below the 20-day moving average crossing at 150-11 are needed
to confirm that a short-term top has been posted. First resistance is
the overnight high crossing at 152-28. First support is the 20-day
moving average crossing at 150-11. Second support is the reaction low
crossing at 147-23.

ENERGY MARKETS

August crude oil was lower due to profit taking overnight as European
debt turmoil intensifies. Additional pressure came from concerns and
news that China’s economic growth is forecasted to slow to 7.4% this
quarter thereby further reducing demand for crude oil. Stochastics
and the RSI are overbought but remains neutral to bullish signaling
that sideways to higher prices are possible near-term. If August
extends the rally off June’s low, the 50% retracement level of this
year’s decline crossing at 94.41 is the next upside target. Closes
below the 20-day moving average crossing at 85.23 would confirm that
a short-term top has been posted. First resistance is the 50%
retracement level of this year’s decline crossing at 94.41. Second
resistance is the 62% retracement level of this year’s decline
crossing at 98.42. First support is the 10-day moving average
crossing at 88.05. Second support is the 20-day moving average
crossing at 85.23.


CURRENCIES

The September Dollar gapped up and was sharply higher overnight due
to renewed European debt concerns and concerns that China’s economic
growth could slow to 7.4% this quarter. Stochastics and the RSI are
diverging but turning neutral to bullish signaling that sideways to
higher prices are possible near-term. If September renews the rally
off June’s low, June’s high crossing at 84.00 then weekly resistance
crossing at 85.04 are the next upside targets. Closes below last
Thursday’s low crossing at 82.80 would confirm that a triple top has
been posted. First resistance is July’s high crossing at 83.98.
Second resistance is June’s high crossing at 84.00. First support is
last Thursday’s low crossing at 82.80. Second support is the reaction
low crossing at 81.56.

GRAINS

December corn was sharply lower due to profit taking overnight as
outside market concerns offset drought concerns. The wide overnight
trading range is forming a potential key reversal down and the low-
range close sets the stage for a lower opening when the day session
begins trading. Early overnight strength saw December spike above the
previous all-time high of 7.99 ¾ before turning lower in late-
overnight trading. If December can sustain closes above this key
resistance level, it could trigger additional buying interest that
could propel December to new record highs in the face of
deteriorating yield expectations for this year’s corn crop. Initial
support begins with the 10-day moving average crossing at 7.57 then
the 20-day moving average crossing at 7.07 1/2. Stochastics and the
RSI are overbought but remain neutral to bullish signaling that
sideways to higher prices are possible near-term. Closes below the
20-day moving average crossing at 7.07 1/2 would confirm that a
short-term top has been posted. First resistance is the overnight
high crossing at 8.00. First support is the 10-day moving average
crossing at 7.57. Second support is the 20-day moving average
crossing at 7.07 1/2.

December wheat was sharply lower due to profit taking overnight as it
consolidates some of this summer’s rally. After opening higher,
December quickly turned down and is working on a potential key
reversal down in the face of strong head winds from outside markets.
The low-range close sets the stage for a steady to lower opening when
the day 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 December extends the rally
off June’s low, the May-2011 high crossing at 9.77 1/2 is the next
upside target. Closes below the 20-day moving average crossing at
8.43 are needed to confirm that a top has been posted. First
resistance is the overnight high crossing at 9.53 1/4. Second
resistance is the May-2011 high crossing at 9.77 1/2. First support
is the 10-day moving average crossing at 8.90 1/4. Second support is
the 20-day moving average crossing at 8.43.

November soybeans were sharply lower overnight due to profit taking
as it consolidated some of this summer. Outside market influences
overshadowed bullish soybean fundamentals as traders decided to bank
some of this summer’s profits. Stochastics and the RSI are overbought
and are turning neutral to bearish hinting that at the very least a
pause is possible in this summer’s rally. Closes below the 20-day
moving average crossing at 15.25 would confirm that a short-term top
has been posted. If November extends this summer’s rally,
psychological resistance crossing at 17.00 is the next upside target.
First resistance is the overnight high crossing at 16.91 1/2. Second
resistance is psychological resistance crossing at 17.00. First
support is the 10-day moving average crossing at 15.92 3/4. Second
support is the 20-day moving average crossing at 15.25.
 

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