Jim's Morning Markets Report--Jan. 13

January 13, 2014 12:34 AM
 

Monday, January 13--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Traders continue to digest last Friday’s much-weaker-than-
expected U.S. jobs report, which begins to suggest the
Federal Reserve pay have to taper its just-implemented
tapering program. The big miss to the downside on non-farm
jobs growth in December now makes upcoming U.S. economic
data that much more important, to see if a trend of weaker
reports is developing. The U.S. dollar index hit a two-week
low on Monday and U.S. Treasury bonds hit a three-week high,
in the wake of the dismal jobs report released Friday. If
the greenback continues to weaken and U.S. Treasuries
continue to strengthen, that would be a bullish development
for the precious metals markets and for other raw commodity
markets.

In overnight news, Iran and six world powers this weekend
agreed to move to the next step in the winding down of
Iran’s nuclear weapons program. This put some pressure on
crude oil markets, given the present embargo that limits
Iran’s oil being sold on the world market, which would end
if Iran continues to cooperate with the major world powers.

The physical gold market in Asia could see better demand in
the very near term as the Chinese Lunar New Year holiday
begins on January 31. That holiday typically sees gold as a
popular gift.

U.S. economic data due for release Monday includes the
employment trends index and the monthly Treasury budget
statement.

Wyckoff’s Daily Risk Rating: 5.0 (No apparent, significantly
market-sensitive events today.)

(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 weaker in early U.S. trading on
some 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. 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
1,838.30 and then at the record high of 1,846.50. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at 1,824.50 and then at last
week’s low of 1,817.50. Sell stops are likely located just
below those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today on
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. 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 3,563.25 and then at last week’s high
of 3,577.00. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at
Friday’s low of 3,529.50 and then at last week’s low of
3,505.75. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 4.5.

Dow futures: Prices are weaker early today on profit taking.
Buy stops likely reside just above technical resistance at
Friday’s high of 16,415 and then at 16,460. Sell stops
likely reside just below technical support at Friday’s low
of 16,320 and then at 16,300. Shorter-term moving averages
are neutral early today, as the 4-day moving average is
below the 9-day. The 9-day moving average is above the 18-
day moving average. Shorter-term oscillators (RSI, slow
stochastics) are bearish early today. Wyckoff's Intra-Day
Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today and
hit a three-week high overnight. Short covering and bargain
hunting are featured as the bulls are gaining upside
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 bullish
early today. Shorter-term resistance lies at the overnight
high of 130 31/32 and then at the December high of 131
12/32. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
130 18/32 and then at 130 even. Sell stops likely reside
just below those levels. Wyckoff's Intra-Day Market Rating:
5.0
 
March U.S. T-Notes: Prices are slightly higher early today
and hit a fresh three-week high on short covering and
bargain hunting. Bulls are gaining 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
bullish early today. Shorter-term resistance lies at the
overnight high of 124.15.5 and then at 124.24.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 124.07.5 and
then at 124.00.0. 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 weaker early today and hit a
two-week low overnight. The greenback bulls are now fading.
Slow stochastics for the dollar index are bearish early
today. The dollar index finds shorter-term technical
resistance at the overnight high of 80.760 and then at
81.000. Shorter-term support is seen at the overnight low of
80.560 and then at the January low of 80.430. Wyckoff's
Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

February Nymex crude oil prices are lower early today and
hovering near a 6.5-month low. Bears have the solid overall
near-term technical advantage. In February Nymex crude, look
for buy stops to reside just above resistance at the
overnight high of $92.88 and then at Friday’s high of
$93.38. Look for sell stops just below technical support at
last week’s low of $91.24 and then at $91.00. Wyckoff's
Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight as traders continue to digest
last Friday’s USDA quarterly grain stocks report. That
report was expected to be generally bearish. However, the
corn data was bullish and did produce big gains in corn,
including follow-through buying today. It now appears a
major low is in place in the corn market. The USDA wheat
data was bearish on Friday. However, I cannot see wheat and
corn pulling in divergent paths, and with corn being
arguably the strongest market of the two, I suspect wheat
may also be close to a market low. The USDA soybean data was
mildly bearish Friday. Corn and soybean traders continue to
keep an eye on South American weather, but so far it has not
been significantly worrisome for the crops.
 

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