Jim's Morning Markets Report--March 14

March 14, 2014 02:03 AM
 

Friday, March 14--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place is heading into the weekend with higher
anxiety. It’s a mostly "risk-off" day for traders and
investors Friday. European and Asian stock markets were
lower overnight due to two main worries: the Ukraine crisis
and slowing China economic growth. U.S. stock indexes
rebounded modestly Friday morning in electronic trading,
following sharp losses suffered on Thursday.

The Russian troop occupation of Ukraine remains a major
concern among traders and investors. Reports Thursday said
more Russian troops were mobilizing near the Ukraine border
with Russia. A referendum from Crimean citizens on secession
is scheduled for Sunday, and that vote outcome result could
escalate the crisis in the region. U.S. and European Union
leaders are threatening to impose economic and diplomatic
sanctions on Russia—likely to be announced next week.  There
has already been a heavy price paid by the Russian economy
for its invasion of Ukraine. Russian stock and financial
markets have taken a beating the past week.

U.S. Secretary of State John Kerry is set to meet with
Russia’s foreign minister Friday, in an effort to scale down
the Ukraine situation. Not much substantive is expected to
come out of that meeting. Kerry this week said it’s likely
that Russian President Vladimir Putin will annex the Crimea
region.

Almost as worrisome as Russia is recent downbeat economic
data coming out of China. This week it was reported China’s
industrial output did not meet market expectations, although
the 8.6%, year-on-year rise in the January and February
period was still very strong by world standards. What the
market place perceives is that the rate of economic growth
in China is gradually slowing. Traders and investors are
also concerned about China’s credit and financial system,
given the recent bond default by a Chinese corporation—the
first one ever.

Markets’ price action Monday morning could be volatile if
the Russia/Ukraine crisis escalates during the weekend. With
the U.S. stock markets already looking "toppy," the China
and Ukraine matters could be the fundamental news that is
the excuse for U.S. equities to put in major tops.

U.S. economic data due for release Friday includes the
producer price index and the University of Michigan consumer
sentiment survey.

Wyckoff’s Daily Risk Rating: 8.0 (The Ukraine situation
remains a significant geopolitical risk in the market place,
while China’s economic and financial conditions are also a
worry. The market place is heading into an uncertain
weekend.)

(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 slightly higher in early U.S.
trading today. The bulls still have the overall near-term
technical advantage, but are fading a bit. 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 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 1,850.00 and
then at 1,860.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at 1,825.00 and then at 1,815.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-day Market
Rating: 5.0

Nasdaq index futures: Prices are slightly higher early
today. 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
the overnight high of 3,654.00 and then at 3,675.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at Thursday’s low of
3,636.25 and then at 3,625.00. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
5.0.

Dow futures: Prices are near steady in early U.S. trading.
Buy stops likely reside just above technical resistance at
16,100 and then at 16,150. Sell stops likely reside just
below technical support at 16,000 and then at 15,950.
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: 5.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early today. Bulls have
regained good upside technical momentum this week, on mostly
safe-haven buying and heavy short covering. Shorter-term
moving averages (4- 9- 18-day) are neutral early today. The
4-day moving average is above 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 the overnight high of 133 22/32 and then
at the March high of 134 1/32. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 133 9/32 and then at 133 even. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 6.0
 
June U.S. T-Notes: Prices are firmer early today. Bulls
have some upside momentum. Shorter-term moving averages (4-
9- 18-day) are neutral early today. The 4-day moving
average is above the 9-day and 18-day. The 9-day is below
the 18-day moving average. Oscillators (RSI, slow
stochastics) are neutral to bullish early today. Shorter-
term resistance lies at the overnight high of 124.26.0 and
then at 125.00.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 124.17.5 and then at 124.10.0. 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 lower in early trading. Prices
Thursday hit a contract low. Prices are in a six-week-old
downtrend on the daily bar chart. Bears are in firm
technical command. Slow stochastics for the dollar index are
neutral early today. The dollar index finds shorter-term
technical resistance at the overnight high of 79.830 and
then at this week’s high of 80.060. Shorter-term support is
seen at 79.590 and then at the contract low of 79.375.
Wyckoff's Intra Day Market Rating: 3.5

NYMEX CRUDE OIL

April Nymex crude oil prices are firmer on more short
covering after hitting a five-week low on Wednesday. The
bears still have the overall near-term technical advantage.
In April Nymex crude, look for buy stops to reside just
above resistance at $99.00 and then at Wednesday’s high of
$99.60. Look for sell stops just below technical support at
$98.00 and then at this week’s low of $97.55. Wyckoff's
Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed overnight. The grain market bulls have
the overall near-term technical advantage. Focus is on these
things, at present: export demand for U.S. grains, the
Ukraine unrest, poor U.S. HRW wheat conditions, and the
upcoming U.S. planting season and any potential planting
delays due to cold weather in the central U.S. These
fundamental factors traders are watching are tilting to the
bullish camp.
 

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