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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 25

Jul 25, 2012

Wednesday, July 25--Jim Wyckoff's Morning Web Log

Note: I am out of the office this week, taking a vacation with my wife in Telluride,
Colorado. My friend and fellow analyst/trader Ken Seehusen is producing 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 lower overnight and is trading below the
June-July uptrend line crossing near 2549.20 as it extended its decline off
last Thursday’s high. Concern that Spain may need a full bailout as Europe’s
debt crisis worsens continues to weigh on the equity markets. Stochastics
and the RSI are bearish signaling that sideways to lower prices are possible
near-term. Closes below the June-July uptrend line crossing near 2549.20
would confirm that the uptrend off June’s low has ended while opening the
door for additional weakness near-term. Closes above the 20-day moving
average crossing at 2588.67 would temper the near-term bearish outlook.
First resistance is the 20-day moving average crossing at 2588.67. Second
resistance is last Thursday’s high crossing at 2658.00. First support is the
reaction low crossing at 2516.50. Second support is the reaction low
crossing at 2503.50.

The September S&P 500 index was higher due to short covering overnight as it
consolidates some of the decline off last week’s high but remains below
broken support marked by the June-July uptrend line crossing near 1340.39.
Stochastics and the RSI are bearish signaling that sideways to lower prices
are possible near-term. Tuesday’s close below the June-July uptrend line
crossing near 1340.39 confirms an end to the rally off June’s low while
opening the door for a larger-degree decline into early August. If September
extends the aforementioned decline, the reaction low crossing at 1302.70 is
the next downside target. Closes above the 10-day moving average crossing at
1349.24 would temper the near-term bearish outlook. First resistance is the
10-day moving average crossing at 1349.24. Second resistance is last
Thursday’s high crossing at 1375.70. First support is the reaction low
crossing near 1320.00. Second support is the reaction low crossing at
1302.70.

INTEREST RATES

September T-bonds were lower due to profit taking overnight as it
consolidates some of this week’s rally. Stochastics and the RSI are
diverging but are 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 150-21 are needed to confirm
that a short-term top has been posted. First resistance is the overnight
high crossing at 153-11. First support is the 20-day moving average crossing
at 150-21. Second support is the reaction low crossing at 147-23.

ENERGY MARKETS

September crude oil was slightly higher due to short covering overnight as
it consolidates some of the decline off last week’s high. Weakness in the US
Dollar helped to support the overnight rebound in crude oil, which has been
under pressure after the American Petroleum Institute said inventories rose
1.35 million barrels last week. 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 resumes the rally off June’s low, the 50%
retracement level of this year’s decline crossing at 94.41 is the next
upside target. 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 20-day moving
average crossing at 86.91. Second support is the reaction low crossing at
84.05.

CURRENCIES

The September Dollar was lower due to profit taking overnight as it
consolidates some of its gains off last week’s low. 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 June’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.

GRAINS

December corn was higher overnight due to the easing of outside market
concerns along with Tuesday’s late-day rebound. While there is rain across
portions of the upper Midwest, it is not reach the parched areas of the corn
belt that are under severe moisture stress. The high-range close sets the
stage for a steady to higher opening when the day session begins trading.
Initial support begins with Tuesday’s low crossing at 7.45 1/2 then the
20-day moving average crossing at 7.25 1/2. Stochastics and the RSI are
overbought but remain neutral to bullish signaling that sideways to higher
prices are possible near-term. If December can close solidly above 8.00, it
could trigger renewed buying interest that would push new-crop corn prices
significantly higher into August. Closes below the 20-day moving average
crossing at 7.25 1/2 would 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 was higher due to short covering overnight as it consolidates
some of this week’s decline but remains below broken support marked by the
10-day moving average crossing at 9.01 3/4. The high-range close sets the
stage for a steady to higher opening when the day session begins trading.
Stochastics and the RSI have turned bearish signaling that additional
weakness is possible near-term. Closes below the 20-day moving average
crossing at 8.56 would confirm that a short-term top has been posted while
opening the door for additional weakness 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 8.56. Second support is the
reaction low crossing at 8.16 1/4.

November soybeans were higher overnight due to short covering after key
support marked by the 20-day moving average crossing at 15.39 1/4 halted the
overnight decline. While there is rains moving across the upper portions of
the Midwest, it remains to be seen whether or not this rain event will move
lower into the heart of the soybean belt to relieve some of the moisture
stress, which is dominating the region. 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 15.39 1/4 would confirm
that a short-term top has been posted and at the same time due technical
damage, which could lead to a possible test of June’s uptrend line crossing
near 14.94 before a bottom to the current decline is found. 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 15.39 1/4. Second support
is the reaction low crossing at 15.05 1/4.


 

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