Jim's Morning Markets Report--March 5

March 5, 2014 12:41 AM
 

Wednesday, March 5--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place presently perceives the situation regarding
the Russian military incursion of Crimea and the civil
unrest in Ukraine has de-escalated the past 48 hours and the
worst of the crisis may be over, as far as markets’ price
reactions. Russian president Putin on Tuesday said he was
not planning on using military force in the Ukraine, even
though his additional troops are on the ground there. Putin
has also halted his military exercises near the Ukrainian
border and ordered troops there back to their bases. The
above developments have put risk appetite back into the
market place. U.S. stock indexes rallied sharply Tuesday and
are at or near their peaks of the major bull runs they are
on. Safe-haven gold and U.S. Treasury markets have wilted a
bit as the situation in Ukraine has at least temporarily
stabilized.

However, the U.S. is still considering taking action on
economic and diplomatic sanctions against Russia. Putin may
have backed down a bit on worry that any sanctions would
seriously damage the already wobbly Russian economy. The
European Union has not been as aggressive as the U.S. on the
sanctions front, as the EU needs energy from Russia.

It was reported Wednesday that Chinese officials say they
want to keep the world’s second-largest economy on a 7.5%
annual economic growth path for 2014. That rate is a bit
higher than many expected and is a bullish underlying factor
for the raw commodity sector. China is the world’s largest
consumer of raw commodities.

In other overnight news, the Euro zone showed stronger
economic strength to start 2014, according to the Markit
purchasing managers index, which rose to 53.3 in February
from 52.9 in January. This particular reading was the
highest since June of 2011. Also, European Union retail
sales data rose by 1.6% in January from December, which is
the best month-on-month growth rate in over a dozen years.
These reports fall into the camp of those not looking for
any further European Central Bank monetary policy stimulus
forthcoming. The ECB holds its monthly monetary policy
meeting on Thursday.

U.S. economic data due for Wednesday includes the weekly MBA
mortgage applications survey, the ADP national employment
report, the ISM non-manufacturing report on business, the
global services PMI, the Fed’s beige book, and the weekly
DOE liquid energy stocks report.

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

(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, and hovering near Tuesday’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 early today. Today, shorter-term technical
resistance comes in at Tuesday’s record high of 1,874.50 and
then at 1,885.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at 1,850.00 and then at Tuesday’s low of 1,843.90. Sell
stops are likely located just below those levels. Wyckoff's
Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today
and hovering near the Tuesday’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 Tuesday’s
high of 3,723.25 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: 6.0.

Dow futures: Prices are slightly higher in early U.S.
trading and hovering near a six-week high. Bulls have the
overall near-term technical advantage. Buy stops likely
reside just above technical resistance at Tuesday’s high of
16,405 and then at 16,450. Sell stops likely reside just
below technical support at Tuesday’s low of 16,320 and then
at 16,300. 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 early today. Wyckoff's Intra-Day Market Rating:
5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly lower early today on
more profit taking after hitting an eight-month high Monday.
Bulls still have the near-term technical advantage but have
faded. 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 132
16/32 and then at 133 even. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 132 6/32 and then at 132 even. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 4.5
 
June U.S. T-Notes: Prices are lower early today on more
profit taking. Bulls are fading. Shorter-term moving
averages (4- 9- 18-day) are still 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 124.13.0 and then
at 126.16.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 124.04.5 and then at 124.00.0. Sell stops
likely reside just below those levels. Wyckoff's Intra-Day
Market Rating: 4.5

U.S. DOLLAR INDEX

The June U.S. dollar index is near steady early today.
Prices are in a five-week-old downtrend on the daily bar
chart. Slow stochastics for the dollar index are bullish
early today. The dollar index finds shorter-term technical
resistance at the overnight high of 80.415 and then at
80.500. Shorter-term support is seen at the overnight low of
80.280 and then at Tuesday’s low of 80.080. Wyckoff's Intra
Day Market Rating: 5.0

NYMEX CRUDE OIL

April Nymex crude oil prices are modestly lower early today
on more profit taking after hitting a contract high on
Monday. Bulls still have the overall near-term technical
advantage but are fading a bit. 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 the overnight high of $103.53 and then at
$104.00. Look for sell stops just below technical support at
$102.50 and then at $102.00. Wyckoff's Intra-Day Market
Rating: 4.5

GRAINS

Markets were mostly slightly lower overnight. The
Ukraine/Russia crisis has likely seen the bullish grain
markets implications play out—unless there is serious
military conflict in the Black Sea region, which would
impact grain exports there. The grain market bulls still
have 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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