Jim's Morning Markets Report--Jan. 28

January 28, 2014 12:36 AM
 

Tuesday, January 28--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

World stock and financial markets have stabilized Tuesday
amid worries about some non-major world currencies being
stressed. Recent weaker Chinese economic data and concern
about the U.S. Federal Reserve reeling in its very easy
monetary policy are credited with pressuring several
secondary world currencies in recent trading sessions. While
markets have calmed a bit Tuesday, the secondary currencies’
ailments have not vanished and market place anxiety could
quickly resurface.

Tuesday and Wednesday the Federal Reserve’s Open Market
Committee (FOMC) meets to set its monetary policy. There is
a general belief, albeit not a clear consensus, that the Fed
will do another $10 billion tapering of its monthly bond-
buying program, also called quantitative easing. A CNBC
survey of 45 economists released Tuesday morning saw the
vast majority expecting the Fed to continue to taper its
monetary policy. At this week’s FOMC meeting Fed Chairman
Ben Bernanke also hands over to Janet Yellen the reins of
the U.S. central bank.

The Chinese Lunar New Year holiday is approaching, whereby
the world’s largest nation and second-largest economy mostly
shuts down for several days.

U.S. economic data due for release Tuesday includes the
weekly Goldman Sachs and Johnson Redbook retail sales
reports, durable goods orders, the S&P/Case-Shiller home
price index, the consumer confidence index, and the Richmond
Fed business survey.

Wyckoff’s Daily Risk Rating: 6.0 (The market place is still
a bit jittery about the emerging currency stresses seen
recently, and there is a hefty slate of U.S. economic data
out Tuesday.)

(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
a corrective bounce after hitting a six-week low Monday.
Bulls have faded recently. 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 early today. Today, shorter-term
technical resistance comes in at Monday’s high of 1,791.70
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 1,775.00 and then at
Monday’s low of 1,767.00. Sell stops are likely located just
below those levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are weaker early today and hit
a five-week low overnight. Price action last week produced a
bearish "key reversal" down on the daily chart, which is one
clue that a market top is in place. The shorter-term moving
averages (4- 9-and 18-day) are neutral early today. The 4-
day moving average is below 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 3,500.00 and then at
3,525.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at the overnight
low of 3,465.75 and then at 3,450.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 4.0.

Dow futures: Prices are firmer in early U.S. trading on a
short-covering bounce after hitting a six-week low Monday.
Bulls have faded to suggest a major market top is in place.
Buy stops likely reside just above technical resistance at
15,900 and then at 15,950. Sell stops likely reside just
below technical support at 15,800 and then at 15,750.
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 bearish
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 more
profit taking after hitting a three-month high on Monday.
The bulls still have some 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 132 21/32 and then at 133 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at 132 even and then at 131 20/32. Sell stops
likely reside just below those levels. Wyckoff's Intra-Day
Market Rating: 4.5
 
March U.S. T-Notes: Prices are weaker on more profit taking
after hitting a two-month high last Friday. 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 neutral to bearish early today. Shorter-term resistance
lies at 125.00.0 and then at Monday’s high of 125.09.5. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 124.21.0 and
then at the 124.16.0. 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 firmer early today on more
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 80.845 and
then at 81.000. Shorter-term support is seen at the
overnight low of 80.475 and then at Monday’s low of 80.390.
Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

March Nymex crude oil prices are firmer early today. Bulls
still have some upside near-term technical momentum. In
March Nymex crude, look for buy stops to reside just above
resistance at $97.00 and then at Monday’s high of $97.18.
Look for sell stops just below technical support at the
overnight low of $95.63 and then at Monday’s low of $95.21.
Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were steady to firmer overnight. There is not much
new in the grains this week. U.S. corn, soybeans and wheat
all need shots of fresh world export demand. Technically,
soybean bulls and bears are on a level playing field. Corn
and wheat market bears are in full command. The demand side
of the equation for grains will continue to be a major
market factor in the grain markets. South American corn and
soybean growing weather is deemed mostly favorable and so
far a non-issue for the markets.
 

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