Jim's Morning Markets Report--Feb. 27

February 27, 2014 01:08 AM
 

Thursday, February 27--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Traders and investors are awaiting Thursday morning’s speech
to the U.S. Senate Banking Committee by Fed Chair Janet
Yellen. The market place wants to see if Yellen tips her
hand regarding any future monetary policy moves by the
Federal Reserve, including the pace of the Fed’s "tapering"
of its monthly bond-buying program. Yellen’s speech was
originally scheduled for a couple weeks ago, but was
postponed due to inclement weather.

The Chinese currency, the yuan, fell to a seven-month low
against the U.S. dollar Thursday, as it appears the Chinese
government is manipulating its yuan for world trade
advantages and to punish currency speculators trading the
yuan.

The crisis in Ukraine is still a worry to the market place.
The country is on the verge of financial collapse and needs
funding soon from outside sources. Also, gunmen took over
the government offices in Crimea Thursday and raised a
Russian flag. This comes as the Russian government has moved
troops and armor closer to Ukraine. If this situation
escalates it would put even more risk aversion into the
world market place, which would likely be bullish for gold
and U.S. Treasuries and bearish for equities.

In the Euro zone, economic sentiment data was upbeat
Thursday and showed the bloc’s economic confidence at a 2.5-
year high.

U.S. economic data due for release Thursday includes the
weekly jobless claims report, durable goods orders, and the
Kansas City Fed manufacturing survey.

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, on mild profit taking. The bulls 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 bearish early
today. Today, shorter-term technical resistance comes in at
the overnight high of 1,846.90 and then at Monday’s all-time
high of 1,856.50. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at this week’s low of 1,830.00 and then at 1,817.00. 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
on mild profit taking. 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 3,688.00 and
then at this week’s high of 3,701.50. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at this week’s low of 3,655.00 and then at
3,638.00. 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 on
profit taking. Bulls still have the overall near-term
technical advantage. Buy stops likely reside just above
technical resistance at 16,178 and then at 16,200. Sell
stops likely reside just below technical support at 16,100
and then at 16,050. 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 to bearish early today. Wyckoff's
Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today and hit a
fresh three-week high overnight. Bulls are gaining upside
technical momentum this week. 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 even with the 18-
day moving average. Oscillators (RSI, slow stochastics) are
bullish early today. Shorter-term resistance lies at the
overnight high of 134 22/32 and then at the February high of
135 3/32. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
134 2/32 and then at 133 24/32. Sell stops likely reside
just below those levels. Wyckoff's Intra-Day Market Rating:
6.0
 
March U.S. T-Notes: Prices are higher early today and hit a
three-week high overnight. Bulls are gaining upside
technical momentum. 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 bullish
early today. Shorter-term resistance lies at the overnight
high of 126.13.0 and then at the February high of 126.16.0.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at the overnight low of
126.01.5 and then at Wednesday’s low of 125.22.0. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The March U.S. dollar index is firmer early today and hit a
two-week high overnight, on short covering. Slow stochastics
for the dollar index are bullish early today. The dollar
index finds shorter-term technical resistance at the
overnight high of 80.600 and then at 80.800. Shorter-term
support is seen at the overnight low of 80.390 and then at
Wednesday’s low of 80.125. 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. 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
Wednesday’s high of $102.90 and then at this week’s high of
$103.45. Look for sell stops just below technical support at
$102.00 and then at Wednesday’s low of $101.58. Wyckoff's
Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed overnight, with soybeans higher and corn
and wheat slightly lower. Grain market bulls still have some
upside technical momentum. Traders will closely examine
Thursday morning’s USDA weekly export sales report, as well
as watch the daily export sales report to see if there has
been any China cancellations of previous U.S. soybean
purchases. The overall technical posture of the raw
commodity sector is turning more bullish by the day, which
is supporting fresh speculative buying interest in the
commodity sector, including the grain futures. Focus will
soon turn from South American crop harvest and yields, to
the U.S. planting season and any potential planting delays.

Jim's Morning Markets Report--Feb. 26

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