Jim's Morning Markets Report--Feb. 5

February 5, 2014 01:01 AM
 

Wednesday, February 5--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

While traders and investors are still concerned about the
situation regarding some emerging market currencies being in
turmoil, most of those troubled smaller currencies have
stabilized this week. This helped the Japanese stock market
make a recovery Wednesday. The Chinese Lunar New Year
holiday has China on holiday this week. That is keeping
other Asian markets somewhat subdued.

In overnight news, the European Union issued a retail sales
report for December that was down 1.6% on the month and down
1.0% on the year.  The Euro Zone purchasing managers index
(PMI) for January came in at 52.9 in January versus 52.1 in
December. This data comes just ahead of the monthly meeting
on monetary policy by the European Central Bank on Thursday.
Ideas are mixed regarding any significant move by the ECB to
further ease its monetary policy at Thursday’s gathering.

The key data point in the U.S. on Wednesday is the ADP
national employment report. The recent spate of
disappointing U.S. economic data has put even more
importance on Friday’s monthly U.S. jobs report for January.
A weaker-than-expected jobs report on Friday would call into
question how much more the Fed would be able reduce its
monthly bond-buying program, also called quantitative
easing. Late last year the U.S. central bank announced its
"tapering" program, whereby the Fed is slowly scaling back
its monthly bond purchases. The early forecasts are for the
non-farm payrolls figure of the Labor Department’s
employment report to come in at up around 190,000 in
January.

Other U.S. economic data due for release Wednesday includes
the weekly MBA mortgage applications survey, the U.S.
Treasury’s quarterly refunding announcement, the ISM non-
manufacturing report on business, the global services PMI,
and the weekly DOE energy stocks report.

Wyckoff’s Daily Risk Rating: 6.0 (There is still some risk
aversion in the market place with the emerging market
currency and world stock market anxieties.)

(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. Bears still have downside near-term technical
momentum. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are
neutral to bearish today. Today, shorter-term technical
resistance comes in at Tuesday’s high of 1,753.00 and then
at 1,760.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at this week’s low of 1,732.50 and then at 1,725.00. 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.
Bears have downside near-term technical momentum. The
shorter-term moving averages (4- 9-and 18-day) are bearish
early today. The 4-day moving average is below the 9-day and
18-day. The 9-day average is below the 18-day. Short-term
oscillators (RSI, slow stochastics) are bearish early today.
Shorter-term technical resistance is located at Tuesday’s
high of 3,473.75 and then at 3,500.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at this week’s low of 3,425.25 and then at
the December low of 3,415.25. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
4.5.

Dow futures: Prices are slightly lower in early U.S.
trading. Bears have downside technical momentum. Buy stops
likely reside just above technical resistance at Tuesday’s
high of 15,405 and then at 15,450. Sell stops likely reside
just below technical support at this week’s low of 15,292
and then at 15,250. Shorter-term moving averages are bearish
early today, as the 4-day moving average is below the 9-day.
The 9-day moving average is below 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 higher early today.
The bulls still have good upside near-term technical
momentum. 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 to bearish
early today. Shorter-term resistance lies at the overnight
high of 134 13/32 and then at 135 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at 134 even and then at this week’s low of 133
14/32. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.0
 
March U.S. T-Notes: Prices are firmer early today. Bulls
still have upside technical momentum. 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
this week’s high of 126.16.0 and then at 126.24.0. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 126.02.5 and
then at 126.00.0. 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 bearish early
today. The dollar index finds shorter-term technical
resistance at the overnight high of 81.280 and then at last
week’s high of 81.440. Shorter-term support is seen at this
week’s low of 81.075 and then at 81.000. Wyckoff's Intra Day
Market Rating: 4.5

NYMEX CRUDE OIL

March Nymex crude oil prices are firmer early today. Bulls
have some upside near-term technical momentum. In March
Nymex crude, look for buy stops to reside just above
resistance at the overnight high of $98.26 and then at last
week’s high of $98.59. Look for sell stops just below
technical support at $97.00 and then at this week’s low of
$96.26. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mostly weaker overnight on corrective pullbacks
from Tuesday’s good gains. The grain market bulls this week
have gained some upside near-term technical momentum to
begin to suggest that market bottoms are in place for corn
and wheat. Wheat is seeing buying interest from concerns
about winter kill in U.S. growing regions, following recent
very cold weather. Traders are awaiting next Monday’s USDA
supply and demand report. Some other raw commodity futures
markets are also seeing price strength and bottoming action,
which is also a clue the raw commodity sector, in general,
could see better times just ahead.
 

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