Jim's Morning Markets Report--March 12

March 12, 2014 01:51 AM
 

Wednesday, March 12--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The Russian troop occupation of Ukraine is still a serious
concern among traders and investors at mid-week. The Group
of Seven nations is set to release a statement later
Wednesday to reiterate its solidarity regarding opposing
Russia’s invasion of Ukraine. It’s likely that the G-7 will
soon impose official economic and diplomatic sanctions on
Russia. A referendum from Crimean citizens on secession is
scheduled for Sunday, and that could be the next flashpoint
in the region. The Russian occupation of Crimea has been a
bullish factor for the safe-haven gold market.

In other overnight news, industrial production in the
European Union fell by 0.2% in January, from December, and
was up 2.1% year-on-year. The decline in EU output was
unexpected and could have an influence on the European
Central Bank’s monetary policy. The ECB has been battling
tepid EU economic growth and deflationary concerns with a
very stimulative monetary policy.

While the raw commodity sector has fared well in the first
quarter of 2014, the copper market has seen its price fall
dramatically the past week. Comex copper futures prices hit
a nearly four-year low Wednesday. Part of the selling
pressure on copper comes from concerns about weakening
Chinese economic growth. Crude oil prices have also been
pressured in part by the concerns about a weakening Chinese
economy. China is the world’s largest copper consumer.
Copper is a major industrial metal worldwide. And many
veteran stock market watchers say copper’s price move can be
a harbinger of price action in the U.S. stock market.
Concern about the health of the Chinese economy has weighed
down the Asian and European stock markets this week.

U.S. economic data due for release Wednesday is again light
and includes the weekly MBA mortgage applications survey,
the monthly budget statement, and the weekly DOE liquid
energy stocks report.

Wyckoff’s Daily Risk Rating: 7.0 (The Ukraine situation
remains a significant geopolitical risk in the market
place.)

(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
today, on profit taking. The bulls still have the solid
overall near-term technical advantage. The shorter-term
moving averages (4-, 9- and 18-day) are bullish early today.
The 4-day moving average is above the 9-day and 18-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 1,866.00 and then at 1,875.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at 1,850.00 and then at
1,840.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today on profit
taking. The shorter-term moving averages (4- 9-and 18-day)
are neutral early today. The 4-day moving average is below
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 3,691.25 and then at 3,700.00. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at 3,665.00 and then at 3,650.00.
Sell stops are likely located just below those levels.
Wyckoff's Intra-Day Market Rating: 4.0.

Dow futures: Prices are weaker in early U.S. trading, on
profit taking. Buy stops likely reside just above technical
resistance at 16,336 and then at 16,400. Sell stops likely
reside just below technical support at 16,300 and then at
16,250. Shorter-term moving averages are still bullish early
today, as the 4-day moving average is above the 9-day and
18-day. The 9-day moving average is above the 18-day moving
average. Shorter-term oscillators (RSI, slow stochastics)
are neutral to bearish early today. Wyckoff's Intra-Day
Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early today on short
covering. Shorter-term moving averages (4- 9- 18-day) are
neutral early today. The 4-day moving average is below the
9-day and 18-day. The 9-day is above the 18-day moving
average. Oscillators (RSI, slow stochastics) are bullish
early today. Shorter-term resistance lies at the overnight
high of 131 28/32 and then at 132 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 131 11/32 and then at
131 even. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.5
 
June U.S. T-Notes: Prices are firmer early today on short
covering. Shorter-term moving averages (4- 9- 18-day) are
bearish early today. The 4-day moving average is below the
9-day and 18-day. The 9-day is below the 18-day moving
average. Oscillators (RSI, slow stochastics) are bullish
early today. Shorter-term resistance lies at 124.00.0 and
then at 124.08.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 123.22.0 and then at 123.16.0. Sell stops
likely reside just below those levels. Wyckoff's Intra-Day
Market Rating: 5.5

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly higher early on more
tepid short covering in a bear market. Prices are in a six-
week-old downtrend on the daily bar chart. Bears are still
in technical command. Slow stochastics for the dollar index
are neutral early today. The dollar index finds shorter-term
technical resistance at this week’s high of 80.060 and then
at 80.200. Shorter-term support is seen at this week’s low
of 79.780 and then at the contract low of 79.590. Wyckoff's
Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

April Nymex crude oil prices are solidly lower and hit a
five-week low early today. The bears have downside near-term
technical momentum. In April Nymex crude, look for buy stops
to reside just above resistance at $99.00 and then at the
overnight high of $99.60. Look for sell stops just below
technical support at $98.00 and then at $97.50. Wyckoff's
Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed but mostly weaker overnight, with
soybeans sharply lower. More profit taking and downside
technical corrections are featured today following recent
gains. The grain market bulls still have the overall near-
term technical advantage, but the soybean bulls are fading
and need to show fresh power soon. Focus is on export demand
for U.S. grains, and is also turning to the upcoming U.S.
planting season and any potential planting delays due to
cold weather in the central U.S.
 

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