Jim's Morning Markets Report--Feb. 7

February 7, 2014 12:47 AM
 

Friday, February 7--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Friday is a big day for the market place. The U.S. Labor
Department’s employment report for January is out at 8:30
a.m. eastern time. The monthly jobs report is always
important, but this particular report is extra important.
Reason: A recent spate of disappointing U.S. economic data,
including the December jobs report, has called into question
how much more the Fed will be able reduce its monthly bond-
buying program, also called quantitative easing. A weaker-
than-expected non-farm jobs number on Friday would find a
growing camp of market watchers who reckon the Fed would at
least temporarily halt 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.

The major feature of the trading week is that 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
next week in some secondary currencies, as China is now back
at work after its Lunar New Year holiday break.

Other U.S. economic data due for release Friday includes the
consumer installment credit report.

Wyckoff’s Daily Risk Rating: 7.0 (The U.S. jobs report could
produce higher price volatility in many markets in morning
trading Friday.)

(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
more short covering and perceived bargain hunting. The
shorter-term moving averages (4-, 9- and 18-day) are still
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 bullish today.
Today, shorter-term technical resistance comes in at
1,780.00 and then at 1,800.00. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at the overnight low of 1,765.90 and then
at 1,750.00. 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 more
short covering and perceived bargain hunting. The shorter-
term moving averages (4- 9-and 18-day) are still 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 to bullish
early today. Shorter-term technical resistance is located at
3,525.00 and then at 3,545.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at the overnight low of 3,487.25 and then at 3,475.00.
Sell stops are likely located just below those levels.
Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer in early U.S. trading, on
more short covering and perceived bargain hunting. Buy stops
likely reside just above technical resistance at this week’s
high of 15,640 and then at 15,700. Sell stops likely reside
just below technical support at 15,549 and then at 15,500.
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 to bullish
early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly lower early today on
more profit taking from recent gains. The bulls still have
some near-term technical momentum but need to show fresh
power soon to keep it. Shorter-term moving averages (4- 9-
18-day) are neutral early today. The 4-day moving average is
below 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 8/32 and then at Thursday’s high of 133 19/32.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at 132 24/32 and then at 132
16/32. 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 more
profit taking. 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 125.23.5 and then at Thursday’s high of 125.30.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at the overnight low of
125.15.0 and then at 125.10.0. Sell stops likely reside
just below those levels. Wyckoff's Intra-Day Market Rating:
4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher early today.
Trading remains choppy. Slow stochastics for the dollar
index are bearish early today. The dollar index finds
shorter-term technical resistance at 81.250 and then at
Thursday’s high of 81.350. Shorter-term support is seen at
the overnight low of 80.945 and then at this week’s low of
80.805. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

March Nymex crude oil prices are slightly lower early today.
Bulls still have upside near-term technical momentum. In
March Nymex crude, look for buy stops to reside just above
resistance at the overnight high of $98.02 and then at this
week’s high of $98.83. Look for sell stops just below
technical support at the overnight low of $97.23 and then at
$96.80. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed to mostly firmer overnight. Grain market
bulls are having a good week, so far. The grain market bulls
have gained upside near-term technical momentum to begin to
suggest that market bottoms are in place for corn and wheat.
Wheat has seen buying interest from concerns about winter
kill in U.S. growing regions, following recent very cold
weather. Traders are also awaiting 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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