Jim's Morning Markets Report--Feb. 18

February 18, 2014 12:40 AM
 

Tuesday, February 18--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *
In overnight news, the Bank of Japan made a de facto
monetary policy stimulus move Tuesday following weak gross
domestic product data released Monday. The BOJ offered
incentives to Japanese banks to lend more money. The Nikkei
stock index rallied sharply and the yen weakened on the BOJ
move. Japanese government officials continue to work to get
out of a deflationary cycle that has been in place for many
years.

Meantime, China’s central bank used repurchase agreements to
drain liquidity from its financial system—the second
straight week of such a move. The Chinese central bank is
trying to curb bank lending a bit after a rise in lending in
January.

In the European Union, the closely watched German ZEW
economic expectations survey unexpectedly fell to 55.7 in
February from 61.7 in January.

A feature in the market place in recent weeks has been a
rally in the gold market. Gold prices are in a six-week-old
uptrend on the daily bar chart and on Tuesday hit a 3.5-
month high of $1,332.40 an ounce, basis the April Comex gold
futures contract. It is my bias that the raw commodity
sector has hit a cycle low and the sector will see better
times just ahead.

U.S. economic data due for release Tuesday includes the
Empire State manufacturing survey, Treasury international
capital data, and the NAHB housing market index.

Wyckoff’s Daily Risk Rating: 5.0 (The world market place
remains calm this week.)

(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 slightly weaker in early U.S.
trading. Bulls still have some upside near-term technical
momentum as prices hover near the all-time high. The
shorter-term moving averages (4-, 9- and 18-day) are bullish
early today. The 4-day moving average is above the 9-day and
18-day. The 9-day is above the 18-day moving average. Short-
term oscillators (RSI, slow stochastics) are neutral early
today. Today, shorter-term technical resistance comes in at
the overnight high of 1,840.00 and then at the December all-
time high of 1,846.50. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at 1,825.00 and then at 1,815.00. Sell stops are
likely located just below those levels. Wyckoff's Intra-day
Market Rating: 4.5

Nasdaq index futures: Prices are slightly lower early today
and did poke to a 13-year high overnight. Bulls still have
upside near-term technical momentum. The shorter-term moving
averages (4- 9-and 18-day) are bullish early today. The 4-
day moving average is above the 9-day and 18-day. The 9-day
average is above the 18-day. Short-term oscillators (RSI,
slow stochastics) are bearish early today. Shorter-term
technical resistance is located at the overnight high of
3,672.50 and then at 3,685.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at 3,650.00 and then at 3,638.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 5.0.

Dow futures: Prices are slightly higher in early U.S.
trading. Bulls have upside near-term technical momentum. Buy
stops likely reside just above technical resistance at
16,200 and then at 16,250. Sell stops likely reside just
below technical support at 16,100 and then at 15,965.
Shorter-term moving averages are neutral early today, as the
4-day moving average is above the 9-day and 18-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 firmer early today. The bulls
have faded recently. Shorter-term moving averages (4- 9- 18-
day) are bearish early today. The 4-day moving average is
below the 9-day and 18-day. The 9-day is below the 18-day
moving average. Oscillators (RSI, slow stochastics) are
neutral to bullish early today. Shorter-term resistance lies
at 133 14/32 and then at 133 24/32. Buy stops likely reside
just above those levels. Shorter-term technical support lies
at the overnight low of 132 21/32 and then at 132 16/32.
Sell stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 5.5
 
March U.S. T-Notes: Prices are higher early today. 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 neutral to bullish early today.
Shorter-term resistance lies at the overnight high of
125.27.5 and then at 126.00.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 125.16.5 and then at 125.08.0. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher early today,
on tepid short covering after hitting a seven-week low on
Monday. Bears still have downside near-term technical
momentum. Slow stochastics for the dollar index are neutral
early today. The dollar index finds shorter-term technical
resistance at the overnight high of 80.265 and then at
80.360. Shorter-term support is seen at the overnight low of
80.140 and then at Monday’s low of 79.990. Wyckoff's Intra
Day Market Rating: 5.0

NYMEX CRUDE OIL

March Nymex crude oil prices are higher early today and
hovering near last week’s 3.5-month high. Bulls have near-
term technical momentum. A six-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 last week’s high of
$101.38 and then at $102.00. Look for sell stops just below
technical support at the overnight low of $100.23 and then
at $100.00. Wyckoff's Intra-Day Market Rating: 6.0

GRAINS

Markets were firmer overnight, with soybeans leading the way
on talk of some crop problems in South American soybean
regions. The grain market bulls have 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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