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Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Jan. 24

Jan 24, 2013

Thursday, January 24--Jim Wyckoff's Morning Web Log

Note: I am out of the office this morning. My friend and fellow
analyst/trader Ken Seehusen produced most of my morning report.
Ken's style is a bit different than mine, but I think you'll also benefit
from Ken's work.—Jim

Overnight Developments

European and U.S. stocks were pressured overnight as Apple’s
earnings report was deemed to have fallen short of expectations. The
U.S. Nasdaq index was solidly lower as Apple is a big part of the
Nasdaq index’s price structure. Economic data released from the
European Union Thursday was a mixed bag. French business
conditions were downbeat in January, while the overall business PMI
for the Euro zone showed contraction, but at the slowest rate of
contraction in 10 months. Spanish and Italian bond yields rose
following news that Spain’s unemployment rate rose to an all-time
high in the fourth quarter of last year. In Asia, HSBC’s monthly PMI for
China rose to a two-year high of 51.9 in January versus 51.5 in
December. The annual World Economic Forum is taking place in Davos,
Switzerland. Market watchers will be looking for any significant news
coming out of the meeting. In other overnight news, reports said
North Korea has said it will test a nuclear bomb.--Jim

The STOCK INDEXES

The March NASDAQ 100 gapped down and was sharply lower overnight
consolidating some of this month’s rally. Stochastics are overbought
and are turning neutral to bearish hinting that a short-term top might
be in or is near. Closes below the 20-day moving average crossing at
2708.92 are needed to confirm that a short-term top has been posted.
If March extends the rally off the late-December low, the 87%
retracement level of the September-November decline crossing at
crossing at 2804.15 is the next upside target. First resistance is the
75% retracement level of the September-November decline crossing
at crossing at 2761.06. Second resistance is the 87% retracement
level of the September-November decline crossing at 2804.15. First
support is the 20-day moving average crossing at 2708.92. Second
support is the January 2nd gap crossing at 2665.00.

The March S&P 500 index was lower overnight as it consolidates some
of the rally off November’s low. Stochastics and the RSI are
overbought but remain neutral to bullish signaling that sideways to
higher prices are possible near-term. If March extends the rally off
November’s low, weekly resistance crossing at 1526.50 is the next
upside target. Closes below the 20-day moving average crossing at
1455.56 would confirm that a short-term top has been posted. First
resistance is Tuesday’s high crossing at 1491.20. Second resistance is
weekly resistance crossing at 1526.50. First support is the 10-day
moving average crossing at 1475.07. Second support is the 20-day
moving average crossing at 1455.56.

INTEREST RATES

March T-bonds was higher overnight and is poised to renew this
month’s rally. Stochastics and the RSI remain bullish signaling that
sideways to higher prices are possible near-term. Closes above the
reaction high crossing at 146-17 would confirm that a short-term low
has been posted while opening the door for additional gains into the
end of January. If March renews the decline off December’s high,
September’s low crossing at 143-08 is the next downside target. First
resistance is the reaction high crossing at 146-17. Second resistance is
the January 2nd gap crossing at 146-23. First support is the reaction
low crossing at 143-17. Second support is September’s low crossing at
143-08.

ENERGY MARKETS

March crude oil was higher overnight as it bounced off support marked
by the 10-day moving average crossing at 95.05. Stochastics and the
RSI are overbought and are turning neutral to bearish warning bulls to
use caution as a pause or setback in the current rally is possible.
Closes below the 20-day moving average crossing at 93.90 are needed
to confirm that a short-term top has been posted. If March extends the
rally off December’s low, the 75% retracement level of the September-
November decline crossing at 97.46 is the next upside target. First
resistance is Wednesday’s high crossing at 96.92. Second resistance is
the 75% retracement level of the September-November decline
crossing at 97.46. First support is the 10-day moving average crossing
at 95.05. Second support is the 20-day moving average crossing at
93.90.

CURRENCIES

The March Dollar was higher overnight as it extends this correction off
last week’s low. Stochastics and the RSI are neutral signaling that
sideways to higher prices are possible near-term. Closes above the
reaction high crossing at 80.27 are needed to confirm that a short-
term low has been posted. If March renews this month’s decline,
December’s low crossing at 79.01 is the next downside target. First
resistance is the reaction high crossing at 80.27. Second resistance is
December’s high crossing at 81.05. First support is last week’s low
crossing at 79.40. Second support is December’s low crossing at
79.01.

GRAINS

March corn was lower overnight as it consolidates below the August-
November downtrend line crossing near 7.28 3/4. 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 and are
turning neutral to bearish signaling that additional setbacks are
possible near-term. Closes below the 20-day moving average crossing
at 7.05 3/4 would confirm that a short-term top has been posted.
Closes above the aforementioned downtrend line and the reaction high
crossing at 7.35 would confirm a trend change while opening the door
for a possible test of the 38% retracement level of the August-January
decline crossing at 7.42. First resistance is the August-November
downtrend line crossing near 7.28 3/4. Second resistance is the 38%
retracement level of the August-January decline crossing at 7.42. First
support is the overnight low crossing at 7.16. Second support is the
20-day moving average crossing at 7.05 3/4.

March wheat was lower overnight as it extends this week’s decline
following Tuesday’s key reversal down. The low-range close sets the
stage for a steady to lower opening when the day session begins
trading. Stochastics and the RSI are turning bearish signaling that
sideways to lower prices are possible near-term. Closes below the 20-
day moving average crossing at 7.67 would confirm that a short-term
top has been posted. If March renews the rally off this month’s low,
the 38% retracement level of the November-January decline crossing
at 8.10 1/2 is the next upside target. First resistance is the 38%
retracement level of the November-January decline crossing at 8.10
1/2. Second resistance is the 50% retracement level of the November-
January decline crossing at 8.33 1/4. First support is the 20-day
moving average crossing at 7.67. Second support is this month’s low
crossing at 7.36 1/4.

March soybeans were lower due to bearish South American weather
forecast overnight. 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 March renews this
month’s rally, the 38% retracement level of the September-January
decline crossing at 14.95 1/4 is the next upside target. Closes below
the 20-day moving average crossing at 14.07 3/4 would temper the
near-term friendly outlook. First resistance is Tuesday’s high crossing
at 14.60 3/4. Second resistance is the 38% retracement level of the
September-January decline crossing at 14.95 1/4. First support the
20-day moving average crossing at 14.07 3/4. Second support is this
month’s low crossing at 13.51 1/2.