Jim's Morning Markets Report--Feb. 12

February 12, 2014 12:54 AM
 

Wednesday, February 12--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place is still buzzing about U.S. Federal Reserve
Chair Janet Yellen’s inaugural testimony on monetary policy
to the Congress Tuesday. Traders and investors examined
closely her remarks and prepared text. The market place’s
"take-away" from Yellen’s comments Tuesday is that she
appears to be following closely in the footsteps of former
Fed chairman Ben Bernanke, which is not surprising and does
favor the dovish monetary policy camp. Yellen’s remarks were
deemed friendly for the gold market and other raw commodity
markets, as well as the U.S. stock market.

In overnight news, there was upbeat economic data coming out
of China, as its exports were reported up 10.6% in January,
year-on-year. This was much higher than the 0.1% rise that
was forecast. China imports were also reported up 10% in
January, year-on-year—also well above market expectations.
This news coming out of the world’s second-largest economy
is a bullish underlying factor for the raw commodity sector,
including the precious metals.

Risk appetite in the market place has ticked up a bit
following news Tuesday the U.S. government said it will
ostensibly raise its debt ceiling without a nasty fight
among Democrats and Republicans, which had been the case in
recent years.

The emerging currency markets have been quiet the past
couple weeks, after a rocky start to the new year. Fed Chair
Yellen’s perceived dovish monetary policy ideas are somewhat
of a salve for the secondary currencies.

U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the weekly DOE
energy stocks report and the monthly U.S. Treasury budget
statement.

Wyckoff’s Daily Risk Rating: 5.0 (No major data points on
tap Wednesday.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge
investor risk appetite in the world market place each day.
Each day I assess the "risk-on" or "risk-off" trader
mentality in the market place with a numerical reading of 1
to 10, with 1 being least risk-averse (most risk-on) and 10
being the most risk-averse (risk-off), and 5 being neutral.

--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early U.S.
trading and hovering near a three-week high. Bulls have
quickly regained upside near-term technical momentum. The
shorter-term moving averages (4-, 9- and 18-day) are neutral
early today. The 4-day moving average is above the 9-day and
18-day. The 9-day is below the 18-day moving average. Short-
term oscillators (RSI, slow stochastics) are neutral to
bullish today. Today, shorter-term technical resistance
comes in at Tuesday’s high of 1,819.30 and then at 1,825.00.
Buy stops likely reside just above those levels. Downside
support for active traders today is located at 1,800.00 and
then at this week’s low of 1,786.50. Sell stops are likely
located just below those levels. Wyckoff's Intra-day Market
Rating: 5.5

Nasdaq index futures: Prices are firmerhigher early today
and hovering near the recent multi-year high. Bulls have
regained good upside near-term technical momentum. The
shorter-term moving averages (4- 9-and 18-day) are neutral
early today. The 4-day moving average is above the 9-day and
18-day. The 9-day average is below the 18-day. Short-term
oscillators (RSI, slow stochastics) are bullish early today.
Shorter-term technical resistance is located at Tuesday’s
high of 3,626.00 and then at the January high of 3,635.25.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at 3,600.00 and then at
Tuesday’s low of 3,578.00. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
6.0.

Dow futures: Prices are slightly higher in early U.S.
trading. Bulls have regained good upside near-term technical
momentum. Buy stops likely reside just above technical
resistance at Tuesday’s high of 15,970 and then at 16,000.
Sell stops likely reside just below technical support at
15,900 and then at 15,850. Shorter-term moving averages are
neutral early today, as the 4-day moving average is above
the 9-day. The 9-day moving average is below the 18-day
moving average. Shorter-term oscillators (RSI, slow
stochastics) are bullish early today. Wyckoff's Intra-Day
Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today. The bulls
are fading but still have the slight overall near-term
technical advantage. Shorter-term moving averages (4- 9- 18-
day) are neutral early today. The 4-day moving average is
below the 9-day. The 9-day is above the 18-day moving
average. Oscillators (RSI, slow stochastics) are bearish
early today. Shorter-term resistance lies at the overnight
high of 132 29/32 and then at 133 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at last week’s low of 132 12/32 and then at 132
even. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 4.5
 
March U.S. T-Notes: Prices are weaker early today. Bulls
are fading. Shorter-term moving averages (4- 9- 18-day) are
neutral early today. The 4-day moving average is below the
9-day. The 9-day is above the 18-day moving average.
Oscillators (RSI, slow stochastics) are bearish early
today. Shorter-term resistance lies at the overnight high
of 125.19.5 and then at 125.24.0. Buy stops likely reside
just above those levels. Shorter-term technical support
lies at last week’s low of 125.07.0 and then at 125.00.0.
Sell stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is firmer early today on short
covering. Slow stochastics for the dollar index are bullish
early today. The dollar index finds shorter-term technical
resistance at 81.000 and then at 81.100. Shorter-term
support is seen at the overnight low of 80.570 and then at
80.500. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

March Nymex crude oil prices are higher early today and hit
a six-week high overnight. Bulls have upside near-term
technical momentum. A steep four-week-old uptrend is in
place on the daily bar chart. In March Nymex crude, look for
buy stops to reside just above resistance at the December
high of $100.79 and then at $101.00. Look for sell stops
just below technical support at $100.00 and then at $99.50.
Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed but mostly weaker overnight. Traders are
focusing on demand for U.S. grains. There are still rumors
that China will cancel previously booked U.S. soybean
purchases, but no confirming news of such has surfaced this
week. The grain market bulls still have some upside near-
term technical momentum to suggest market bottoms are in
place for corn and wheat. The raw commodity market sector is
showing signs of a collective bottom being in place, and
that’s a bullish underlying factor for the grains.
 

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