Jim's Morning Markets Report--Feb. 6

February 6, 2014 12:44 AM
 

Thursday, February 6--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

World stock markets have stabilized from their recent sell
offs, partly due to the strains on some emerging market
currencies easing this week. Don’t be surprised if the
anxiety rises again in some secondary currencies once China
comes back to work after its Lunar New Year holiday break.

The important data point for Thursday is the monthly
monetary policy meeting of the European Central Bank,
including a press conference by ECB president Mario Draghi.
Ideas were mixed on what, if any, action the ECB would take
following several weeks of mostly upbeat economic data
coming out of the European Union. However, this week there
has been a couple of downbeat economic reports coming out of
the EU. And there are still concerns about the very low rate
of inflation in the EU that has some ECB watchers calling
for additional monetary stimulus measures from the central
bank.

The Bank of England left its key interest rates unchanged at
its latest meeting Thursday.

A 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.

U.S. economic data due for release Thursday includes the
weekly jobless claims report, the Challenger job cuts
report, preliminary productivity and costs, the U.S. trade
deficit report, and the ICSC chain store sales 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 firmer in early U.S. trading, on
short covering. Bears still have some 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 bullish today. Today, shorter-
term technical resistance comes in at 1,760.00 and then at
1,770.00. Buy stops likely reside just above those levels.
Downside support for active traders today is located at the
overnight low of 1,744.00 and then at this week’s low of
1,732.20. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today on short
covering. Bears still have some 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 neutral
early today. Shorter-term technical resistance is located at
the overnight high of 3,469.25 and then at 3,475.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
3,447.75 and then at 3,425.00. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
5.5.

Dow futures: Prices are firmer in early U.S. trading, on
short covering. Bears still have some downside technical
momentum. Buy stops likely reside just above technical
resistance at 15,450 and then at 15,500. Sell stops likely
reside just below technical support at 15,367 and then at
15,300. 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: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today on profit
taking from recent gains. The bulls still have some upside
near-term technical momentum but need to show fresh power
soon. Shorter-term moving averages (4- 9- 18-day) are still
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 bearish early today.
Shorter-term resistance lies at the overnight high of 133
17/32 and then at 134 even. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 133 5/32 and then at 133 even. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 4.5
 
March U.S. T-Notes: Prices are weaker early today on profit
taking. Bulls still have some 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 bearish early today. Shorter-
term resistance lies at the overnight high of 125.30.5 and
then at 126.08.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 125.22.5 and then at 125.16.0. 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.
Slow stochastics for the dollar index are neutral early
today. The dollar index finds shorter-term technical
resistance at Wednesday’s high of 81.345 and then at last
week’s high of 81.440. Shorter-term support is seen at the
overnight low of 81.125 and then at 81.000. Wyckoff's Intra
Day Market Rating: 5.5

NYMEX CRUDE OIL

March Nymex crude oil prices are higher early today and
hovering near the recent high. Bulls have upside near-term
technical momentum. In March Nymex crude, look for buy stops
to reside just above resistance at last week’s high of
$98.59 and then at $99.00. Look for sell stops just below
technical support at $98.00 and then at the overnight low of
$97.25. Wyckoff's Intra-Day Market Rating: 6.0

GRAINS

Markets were mixed to mostly firmer overnight. Traders are
awaiting Thursday morning’s weekly USDA export sales report.
The grain market bulls are having a good week this week and
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 also 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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