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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 26

Jul 26, 2012

Thursday, July 26--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 higher due to short covering overnight as it
consolidates some of the decline off last week’s high. Stochastics and the
RSI remain bearish signaling that sideways to lower prices are possible
near-term. Multiple closes below the June-July uptrend line crossing near
2553.22 are needed to confirm that the rally off June’s low has ended while
opening the door for additional weakness near-term. Closes above the 20-day
moving average crossing at 2589.36 would temper the near-term bearish
outlook. First resistance is the 20-day moving average crossing at 2589.36.
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. Stochastics and the
RSI remain bearish signaling that sideways to lower prices are possible
near-term. If September extends the decline off last Thursday’s high, the
reaction low crossing at 1320.00 is the next downside target. Closes above
the 10-day moving average crossing at 1351.24 would temper the near-term
bearish outlook. First resistance is the 10-day moving average crossing at
1351.24. 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 remain 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 150-27 are needed to confirm
that a short-term top has been posted. First resistance is Wednesday’s high
crossing at 153-11. First support is the 20-day moving average crossing at
150-27. Second support is the reaction low crossing at 147-23.

ENERGY MARKETS

September crude oil was higher due to short covering overnight as it
consolidates some of the decline off last week’s high. Stochastics and the
RSI are neutral to bearish signaling that sideways to lower prices are
possible near-term. Closes below the 20-day moving average crossing at 87.38
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 87.38. Second
support is the reaction low crossing at 84.05.

CURRENCIES

The September Dollar was sharply lower overnight and below the 10-day moving
average signaling that a short-term top might be in or is near. Stochastics
and the RSI are diverging and are turning bearish signaling that a
short-term top is in or near. Closes below last Thursday’s low crossing at
82.80 would confirm that a short-term top has been posted. If September
extends the rally off June’s low, weekly resistance crossing at 85.04 is the
next upside target. 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 slightly lower overnight as a sharply lower US Dollar
offset selling triggered by scattered rains across portions of the upper
Midwest. For much of this year’s corn crop it is too late for rain to offset
much of the damage of this summer’s drought. While a good rain could help to
stabilize the deterioration of the corn crop, it will not add lost bushels
back to the crop at this point in time. The mid-range close sets the stage
for a steady to lower 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 7.33 1/4. Stochastics and the RSI are overbought
but remain neutral to bullish signaling that sideways to higher prices are
possible near-term. Multiple closes 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 7.33 1/4
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 7.33 1/4.

December wheat was lower overnight as it consolidates some of Wednesday’s
rally but remains above initial support marked by the 10-day moving average
crossing at 9.08 1/2. The high-range close sets the stage for a steady to
lower opening when the day session begins trading. Stochastics and the RSI
are bearish signaling that additional weakness is possible near-term. Closes
below the 20-day moving average crossing at 8.63 3/4 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 8.63 3/4. Second support is the reaction low crossing at
8.16 1/4.

November soybeans were lower overnight as scattered rains move across
portions of the upper Midwest. For areas that received overnight rains and
those, which will receive rain today, it will halt deterioration of the crop
and in some cases it could add a few bushels to the yield. However, this
rain event so far has not been of the magnitude needed to significantly
change the direction of the size of this year’s soybean crop. 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 15.50 1/2
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 15.05 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 15.50 1/2.
Second support is the reaction low crossing at 15.05 1/4.

 

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