Jim's Morning Markets Report--Feb. 20

February 20, 2014 12:31 AM
 

Thursday, February 20--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Traders and investors are still buzzing about Wednesday
afternoon’s FOMC minutes, in which the Federal Reserve’s
voting members held the line on wanting to keep the Fed’s
"tapering" process in place—despite some recent weaker-than-
expected U.S. economic data. The FOMC minutes were deemed
just a bit more hawkish than expected, but did not have a
major impact on the market place.

There was a downbeat manufacturing purchasing managers’
index coming out of China Thursday. The Markit preliminary
manufacturing PMI came in at a seven-month low of 48.3 in
February from 49.5 in January. A reading below 50.0 suggests
contraction in the sector. This report adds to recent
concerns about a slowing Chinese economy—the second-largest
in the world and the world’s largest raw commodity consumer.
Meantime, the European Union manufacturing and services PMI
came in at 52.7 in February versus 52.9 in January. The
China PMI data and the slightly more hawkish FOMC minutes
worked to put some downside pressure on Asian and European
stock markets Thursday.

Violence in Ukraine this week is getting major news
coverage. There was a truce reported between the government
and protesters late Wednesday, but gunfire was reported in
Kiev Thursday. If that situation sees violence escalate,
more risk aversion would enter the market place to more
directly impact markets.

There is a heavy slate of U.S. economic data due for release
Thursday, including the weekly jobless claims report, real
earnings, the consumer price index, leading economic
indicators, the flash manufacturing PMI, the Philadelphia
Fed business outlook survey, and the weekly DOE energy
stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (The violence in Ukraine
and a heavy slate of U.S. economic data due out Thursday
have put some more risk into the market place.)

(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. The shorter-term moving averages (4-, 9- and 18-
day) are still 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 bearish early today. Today, shorter-term
technical resistance comes in at the overnight high of
1,829.00 and then at 1,840.00. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at the overnight low of 1,817.60 and then
at 1,810.00. 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.
Bulls still have some 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 3,660.25 and then at 3,675.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
3,639.50 and then at 3,625.00. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
4.5.

Dow futures: Prices are weaker in early U.S. trading. Buy
stops likely reside just above technical resistance at
16,016 and then at 16,080. Sell stops likely reside just
below technical support at 15,965 and then at 15,900.
Shorter-term moving averages are bullish early today, as the
4-day moving average is above the 9-day and 18-day. The 9-
day moving average is above the 18-day moving average.
Shorter-term oscillators (RSI, slow stochastics) are neutral
early today. Wyckoff's Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly firmer early today.
Shorter-term moving averages (4- 9- 18-day) are neutral
early today. The 4-day moving average is above the 9-day.
The 9-day is below the 18-day moving average. Oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term resistance lies at the overnight high of 133 15/32 and
then at this week’s high of 133 29/32. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 132 27/32 and then at
this week’s low of 132 21/32. Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 5.5
 
March U.S. T-Notes: Prices are slightly higher early today.
Shorter-term moving averages (4- 9- 18-day) are bullish
early today. The 4-day moving average is above the 9-day.
The 9-day is above the 18-day moving average. Oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term resistance lies at the overnight high of 126.02.0 and
then at this week’s high of 126.09.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 125.21.0 and then at
this week’s low of 125.16.5. 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 higher early today on short
covering in a near-term bear market. Slow stochastics for
the dollar index are bullish early today. The dollar index
finds shorter-term technical resistance at the overnight
high of 80.405 and then at 80.500. Shorter-term support is
seen at 80.220 and then at the overnight low of 80.070.
Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are slightly lower early today
on mild profit taking, and hovering near Wednesday’s new
contract high. Bulls still have near-term technical
momentum. A steep six-week-old uptrend is in place on the
daily bar chart. In April Nymex crude, look for buy stops to
reside just above resistance at Wednesday’s contract high of
$103.29 and then at $104.00. Look for sell stops just below
technical support at the overnight low of $102.45 and then
at $102.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were slightly lower overnight, on corrective
pullbacks from recent good gains. Grain market bulls are
enjoying success recently. Soybeans are supported on reports
of crop problems in South American soybean regions.
Fundamentally, improving demand for U.S. grains has boosted
the futures markets recently. Technically, the grain market
bulls still have upside near-term technical momentum to
suggest market bottoms are in place for corn and wheat.
USDA’s annual Ag Outlook Conference begins today, and some
market-sensitive information will likely come out of that
meeting.
 

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