Jim's Morning Markets Report--Feb. 25

February 25, 2014 12:42 AM
 

Tuesday, February 25--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, China’s stock markets were pressured by
news the China central bank drained over 100 billion yuan
from the Chinese financial system. The move is a short-term
tightening of China’s monetary policy, but the longer-term
implications of the move are unclear. The move by the
Peoples Bank of China did not have much of an impact on
world markets.

Traders will be looking for some direction from U.S.
economic data due for release Tuesday, highlighted by the
consumer confidence index. Other U.S. data due out Tuesday
includes the weekly Johnson Redbook and Goldman Sachs retail
sales reports, the S&P/Case-Shiller home price index, the
house price index, and the Richmond Fed business survey.

The Ukrainian civil unrest remains a significant
geopolitical factor for the market place. Attention is
turning from who will lead Ukraine to how will the nation
can survive, financially. The U.S., the European Union and
the International Monetary Fund are trying to figure out how
to prop up Ukraine’s financial system before it collapses.
The situation there remains fluid. The Ukrainian
developments and some civil unrest and violence in Thailand
recently have prompted increased safe-haven demand for gold.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine uncertainty
and recent Thailand unrest are keeping some risk aversion in
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 lower in early U.S.
trading today after hitting a new record high Monday. The
bulls still have the solid overall near-term technical
advantage. 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 to bearish early today. Today,
shorter-term technical resistance comes in at Monday’s all-
time high of 1,856.50 and then at 1,865.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at Monday’s low of 1,830.00 and
then at last week’s low of 1,817.60. 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
on profit taking after prices hit a 13.5-year high on
Monday. 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 neutral
to bearish early today. Shorter-term technical resistance is
located at Monday’s high of 3,701.50 and then at 3,715.00.
Buy stops likely reside just above those levels. On the
downside, short-term support is seen at Monday’s low of
3,655.00 and then at last week’s low of 3,638.25. 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 on
profit taking after hitting a five-week high on Monday.
Bulls still have the overall near-term technical advantage.
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 Monday’s low of 16,110 and then
at Friday’s low of 16,080. 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 firmer early today on short
covering. 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 Monday’s high of 133 10/32
and then at 133 15/32. Buy stops likely reside just above
those levels. Shorter-term technical support lies at the
overnight low of 132 30/32 and then at Monday’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 bearish
early today. The 4-day moving average is below 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 Monday’s high of 125.24.0 and then
at 126.00.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at last week’s
low of 125.08.5 and then at the February low of 125.03.0.
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 lower early today.
Slow stochastics for the dollar index are neutral early
today. The dollar index finds shorter-term technical
resistance at the overnight high of 80.270 and then at
Monday’s high of 80.400. Shorter-term support is seen at the
overnight low of 80.100 and then at last week’s low of
79.950. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

April Nymex crude oil prices are lower early today on profit
taking. Bulls still have the overall near-term technical
momentum. A steep seven-week-old uptrend is still in place
on the daily bar chart. In April Nymex crude, look for buy
stops to reside just above resistance at $102.50 and then at
$103.00. Look for sell stops just below technical support at
$101.69 and then at $101.00. Wyckoff's Intra-Day Market
Rating: 4.5

GRAINS

Markets were mixed but mostly slightly weaker overnight—
soybeans and corn weaker and wheat near steady. Hot and dry
weather late in the growing season in South America is
hurting the soybean crop there. Grain market bulls still
have some upside technical momentum. The overall technical
posture of the raw commodity sector is turning more bullish,
which is supporting fresh speculative buying interest in the
commodity sector, including the grain futures.
 

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