Jim's Morning Markets Report--March 21

March 21, 2014 01:23 AM
 

Friday, March 21--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

A feature in the market place this week has been the plunge
in the value of the Chinese yuan against the U.S. dollar,
after China’s monetary officials widened the trading band
between the two currencies. The yuan has dropped to a more-
than-one-year low against the greenback this week.

Meantime, the U.S. dollar index has surged following the
FOMC news Wednesday afternoon, which in turn has been a
bearish underlying factor for commodity markets, including
gold. The dollar index is a basket of six major currencies
weighted against the greenback.

The Ukraine-Russia conflict has not completely disappeared
from the radar screen of the market place. Tensions have
risen a bit Friday as the U.S. on Thursday slapped stiffer
economic sanctions on Russia. The European Union is set to
follow suit with its own sanctions against Russia. And
Russia, in turn, is sanctioning the U.S. and EU. Gold, the
U.S. dollar and U.S. Treasuries are not presently drawing
significant safe-haven bids from this situation. However,
any significant escalation of tensions between Ukraine and
Russia would quickly put keen risk-aversion back into the
market place.

The Russian stock and financial markets are feeling the
bearish effects of world sanctions and from credit ratings
agencies that have or are looking to downgrade Russia’s
credit rating.

There is no major U.S. economic data due for release Friday.
Traders are looking ahead to some fresh Chinese economic
data due out early next week.

Wyckoff’s Daily Risk Rating: 5.0 (The Ukraine situation has
for the moment de-escalated and has become a non-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 firmer in early U.S. trading
today and are poised to close at a technically bullish
weekly high close. The bulls have the solid 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 above the 9-day and 18-day. The 9-day is
below 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 the overnight low of
1,863.40 and then at 1,850.00. Sell stops are likely located
just below those levels. Wyckoff's Intra-day Market Rating:
6.0

Nasdaq index futures: Prices are higher early today. The
shorter-term moving averages (4- 9-and 18-day) are neutral
early today. The 4-day moving average is above the 9-day and
18-day. The 9-day average is below the 18-day. Short-term
oscillators (RSI, slow stochastics) are neutral early today.
Shorter-term technical resistance is located at the
overnight high of 3,706.00 and then at 3,721.25. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at the overnight low of 3,688.25
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 firmer in early U.S. trading. Buy
stops likely reside just above technical resistance at
16,350 and then at 16,400. Sell stops likely reside just
below technical support at 16,265 and then at 16,200.
Shorter-term moving averages are neutral early today, as the
4-day moving average is above the 9-day. The 9-day moving
average is below the 18-day moving average. Shorter-term
oscillators (RSI, slow stochastics) are neutral to bullish
early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly higher early today on
a corrective bounce and short covering from losses posted
Wednesday. Bulls have the slight overall near-term technical
advantage but are fading. 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
neutral to bearish early today. Shorter-term resistance lies
at the overnight high of 132 11/32 and then at 132 20/32.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at this week’s low of 131 26/32
and then at 131 16/32. Sell stops likely reside just below
those levels. Wyckoff's Intra-Day Market Rating: 5.5
 
June U.S. T-Notes: Prices are slightly higher early today.
Bulls gave faded badly this week. 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 neutral to bearish early today. Shorter-
term resistance lies at Thursday’s high of 123.19.0 and
then at 123.24.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 123.11.5 and then at this week’s low of
123.05.0. 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 lower in early
trading, on a corrective pullback from strong gains seen the
past two days. Bears still have the near-term technical
advantage. Slow stochastics for the dollar index are neutral
to bullish early today. The dollar index finds shorter-term
technical resistance at the overnight high of 80.385 and
then at this week’s high of 80.505. Shorter-term support is
seen at the overnight low of 80.230 and then at 80.000.
Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

May Nymex crude oil prices are firmer in early U.S. trading.
The bulls and bears are on a level near-term technical
playing field. In May Nymex crude, look for buy stops to
reside just above resistance at $100.00 and then at $101.00.
Look for sell stops just below technical support at $99.00
and then at the overnight low of $98.25. Wyckoff's Intra-Day
Market Rating: 5.5

GRAINS

Markets were weaker overnight on some profit taking heading
into the weekend. The grain market bulls still have the
overall near-term technical advantage. Focus remains on U.S.
exports and the potential for China cancelling soybean sales
previously booked. The rally in the U.S. dollar index this
week is a bearish underlying factor for the grains. The
March 31 USDA planting intentions report is coming into
view. It’s one of the most important USDA reports of the
year.
 

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