Jim's Morning Markets Report--March 4

March 4, 2014 12:48 AM
 

Tuesday, March 4--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

It appears the situation regarding the Russian military
invasion of Crimea and the civil unrest in Ukraine has de-
escalated just a bit Tuesday, which has put some risk
appetite back into the world market place. The U.S. dollar,
U.S. Treasuries, gold and crude oil have all backed down
Tuesday from their rallies Monday, while the U.S. stock
indexes are rallying Tuesday morning, after selling pressure
Monday. Russian stock and financial markets were also
reportedly stabilizing Tuesday. This is likely due to
reports Russian President Vladimir Putin has halted his
military exercises near the Ukrainian border and ordered
troops there back to their bases. However, Russian troops
are still on the ground in the Crimea region of Ukraine and
this situation is still fluid and could escalate quickly.
And the matter of Ukraine being in civil disarray and near
financial collapse has not changed the past 24 hours.

The U.S. is already taking action on economic and diplomatic
sanctions against Russia. Economic sanctions levied against
an already unstable Russian economy would have major
ramifications for Russia and those world companies that deal
with Russia. Ukraine and the Black Sea region are rich in
natural resources and the Black Sea is a major export hub.
Any military conflict in the region would very likely
disrupt shipping of any commodity coming out of the Black
Sea.

In other news overnight, producer prices in the European
Union fell 0.3% in January, and were down 1.3% year-on-year.
That’s the largest year-on-year drop in producer prices in
the Euro zone in over four years. The report underscores
there should still be concern in the market place about
deflationary price pressures in the European Union.

U.S. economic data due for Tuesday includes the weekly
Johnson Redbook and Goldman Sachs retail sales reports, the
ISM New York report on business, and the IBD/TIPP economic
optimism index. The big economic news of the week will be
the European Central Bank’s monthly monetary policy meeting
on Thursday and the U.S. monthly employment report on
Friday.

Wyckoff’s Daily Risk Rating: 6.0 (The Russian military
invasion of Crimea and the Ukraine unrest have de-escalated
a bit.)

(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 solidly higher in early U.S.
trading today, and right back near last week’s record high.
The bulls 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 neutral to bullish early today. Today,
shorter-term technical resistance comes in at the record
high of 1,866.20 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 the
overnight low of 1,843.90. Sell stops are likely located
just below those levels. Wyckoff's Intra-day Market Rating:
7.0

Nasdaq index futures: Prices are sharply higher early today
and near last week’s 13.5-year high. 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
average is above the 18-day. Short-term oscillators (RSI,
slow stochastics) are neutral early today. Shorter-term
technical resistance is located at last week’s high of
3,722.50 and then at 3,735.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at 3,700.00 and then at 3,685.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 7.0.

Dow futures: Prices are sharply higher in early U.S.
trading. Bulls have the overall near-term technical
advantage. Buy stops likely reside just above technical
resistance at last week’s high of 16,385 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
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: 7.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower early today on profit
taking after hitting an eight-month high Monday. Bulls still
have the near-term technical advantage. 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 bearish early today. Shorter-term resistance lies at 135
even and then at the overnight high of 135 8/32. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 134 15/32 and
then at 134 even. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 4.0
 
June U.S. T-Notes: Prices are lower early today on profit
taking after hitting a four-month high Monday. Bulls still
have the overall near-term technical advantage. 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 bearish early today. Shorter-term
resistance lies at the overnight high of 126.18.5 and then
at Monday’s high of 126.24.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 126.01.5 and then at 126.00.0. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The June U.S. dollar index is lower early today. Prices are
in a five-week-old downtrend on the daily bar chart. Slow
stochastics for the dollar index are bearish early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 80.175 and then at 80.250. Shorter-
term support is seen at the overnight low of 79.955 and then
at Monday’s low of 79.780. Wyckoff's Intra Day Market
Rating: 4.0

NYMEX CRUDE OIL

April Nymex crude oil prices are lower early today on profit
taking after hitting a contract high on Monday. Bulls still
have the overall near-term technical momentum. A steep two-
month-old uptrend is still in place on the daily bar chart.
In April Nymex crude, look for buy stops to reside just
above resistance at $104.00 and then at the overnight high
of $104.96. Look for sell stops just below technical support
at the overnight low of $103.30 and then at $103.00.
Wyckoff's Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight. The Ukraine/Russia crisis is
still impacting the grain markets. However, the bullish
implications of that matter have likely played out—unless
there is serious military conflict in the Black Sea region,
which would impact grain exports there. The grain market
bulls still have some near-term technical momentum on their
side, to suggest major market lows are in place and that
prices can work sideways or sideways to higher the rest of
this year. Focus will soon turn to the U.S. planting season
and any potential planting delays due to cold weather in the
central U.S.
 

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