Jim's Morning Markets Report--March 19

March 19, 2014 01:38 AM
 

Wednesday, March 19--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Focus of the market place is on the U.S. Federal Reserve’s
Open Market Committee (FOMC) meeting that ends Wednesday
afternoon with a statement. Fed Chair Janet Yellen will then
deliver her first press conference. It is expected the FOMC
will continue on its "tapering" program, whereby monthly
bond purchases are whittled down by $10 billion a month.
Recent U.S. economic data has been a mixed bag, which is
making it tougher for the market place to read what the
Fed’s intentions might be. There could be some markets
volatility following the FOMC statement and during Yellen’s
press conference.

There are rumors floating around Wednesday that another
Chinese corporation is in default on an interest rate
payment on its bonds. However, there has been no
confirmation of such by China. Still, traders and investors
are wondering if "where there’s smoke, there’s fire." A few
weeks ago the first corporate bond default occurred in
China.

The Crimea region of Ukraine annexed by Russia has not been
met by major violence in the Ukraine, at least not yet.
Also, the threatened U.S. and European Union sanctions have
so far not been as tough as some expected. These
developments have assuaged the market place so far. U.S. and
world stock markets have rallied this week in the wake of
that situation. Russian President Vladimir Putin on Tuesday
confirmed his country will annex Crimea.

The gold market sold off and stock indexes rallied Tuesday
when Putin said Russia will not seek to annex other regions
of Asia. Many doubt Putin’s word on the matter. Still, this
geopolitical incident has died down from a market place
perspective, and that’s been bearish for safe-haven gold.
But the Russia-Ukraine situation is still far from stable.
Any escalation of tensions in Ukraine or further incursions
into Ukraine from Russia would quickly put keen risk-
aversion right back into the market place.

U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the weekly DOE
energy stocks report and the FOMC statement.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has
for the moment de-escalated and has become a tertiary market
factor.)

(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 near steady in early U.S.
trading today. The bulls still have the overall near-term
technical advantage. 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 is above
the 18-day moving average. Short-term oscillators (RSI, slow
stochastics) are neutral to bullish early today. Today,
shorter-term technical resistance comes in at 1,874.50 and
then at the record high of 1,891.00. Buy stops likely reside
just above those levels. Downside support for active traders
today is located at Tuesday’s low of 1,846.20 and then at
1,832.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are firmer early today. The
shorter-term moving averages (4- 9-and 18-day) are 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
3,721.25 and then at the March high of 3,740.00. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at the overnight low of 3,694.50
and then at 3,675.00. Sell stops are likely located just
below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are slightly higher in early U.S.
trading. Buy stops likely reside just above technical
resistance at Tuesday’s high of 16,300 and then at 16,350.
Sell stops likely reside just below technical support at
16,250 and then at Tuesday’s low of 16,195. Shorter-term
moving averages are neutral early today, as the 4-day moving
average is below 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 bullish early today.
Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early today. Bulls have
the overall near-term technical advantage. 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 early today. Shorter-term
resistance lies at the overnight high of 133 8/32 and then
at this week’s high of 133 20/32. Buy stops likely reside
just above those levels. Shorter-term technical support lies
at the overnight low of 133 even and then at this week’s low
of 132 21/32. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5
 
June U.S. T-Notes: Prices are near steady early today.
Bulls have the overall near-term technical advantage.
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 early
today. Shorter-term resistance lies at the overnight high
of 124.19.0 and then at this week’s high of 124.23.0. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at this week’s low of 124.08.0 and
then at 124.00.0. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly higher in early
trading, on tepid short covering in a bear market. Prices
are in a six-week-old downtrend on the daily bar chart.
Bears are still in firm 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 79.690 and then at 79.830. Shorter-term support is
seen at the contract low of 79.375 and then at 79.250.
Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

April Nymex crude oil prices are near steady in early U.S.
trading. The bears still have the overall near-term
technical advantage, but the bulls gained a bit of upside
momentum with Tuesday’s solid gains. In April Nymex crude,
look for buy stops to reside just above resistance at
$100.00 and then at $100.33. Look for sell stops just below
technical support at $99.00 and then at $98.50. Wyckoff's
Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed overnight—corn and wheat weaker and
soybeans higher. The grain market bulls still have the
overall near-term technical advantage. Traders are focusing
on export demand and the upcoming U.S. planting season. The
March 31 USDA planting intentions report is also coming into
view. It’s one of the most important USDA reports of the
year.
 

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