NOTE: I am out of the office this week. My friend and fellow market analyst Ken Seehusen will produce my reports. I’ll be back at work full throttle next Monday morning. Happy New Year!–Jim
The STOCK INDEXES
The March NASDAQ 100 was lower overnight as it followed Europe’s lead lower. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 3516.03 would confirm that a short-term top has been posted and would then open the door for additional weakness near-term. If March extends this year’s rally, monthly resistance crossing at 3668.00 is the next upside target. First resistance is Tuesday’s high crossing at 3594.75. Second resistance is monthly resistance crossing at 3668.00. First support is the 20-day moving average crossing at 3516.03. Second support is December’s low crossing at 3415.25.
The March S&P 500 was lower due to profit taking overnight, which stemmed from weakness in European markets. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends 2013’s rally into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing at 1804.32 would confirm that a short-term top has been posted. First resistance is Tuesday’s high crossing at 1846.50. Second resistance is unknown. First support is the 20-day moving average crossing at 1804.32. Second support is December’s low crossing at 1755.00.
March T-bonds were lower overnight as it extends Tuesday’s decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off October’s high, weekly support crossing at 125-29 is the next downside target. Closes above the 20-day moving average crossing at 129-05 are needed to confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 129-05. Second resistance is the reaction high crossing at 130-11. First support is Tuesday ’s low crossing at 127-23. Second support is weekly support crossing at 125-29.
ENERGY MARKETS
February Nymex crude oil was lower overnight and trading below the 20-day moving average. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 98.36 would confirm that a short-term top has been posted. If February renews the rally off November’s low, the 62% retracement level of the August-November decline crossing at 100.82 is the next upside target. First resistance is last Friday’s high crossing at 100.75. Second resistance is the 62% retracement level of the August-November decline crossing at 100.82. First support is the 20-day moving average crossing at 98.36. Second support is the reaction low crossing at 96.52.
CURRENCIES
The March Dollar gapped up and was sharply higher overnight. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off last week’s high, the reaction low crossing at 79.50 is the next downside target. If March renews the rally off December’s low, November’s high crossing at 81.73 is the next upside target. First resistance is December’s high crossing at 81.18. Second resistance is November’s high crossing at 81.73. First support is December’s low crossing at 79.50. Second support is October’s low crossing at 79.35.
GRAINS
The grain markets will open at 9:30 CST. Here is a recap of Tuesday’s trading.
March Corn closed down 1 1/2-cents at 4.22. March corn closed lower on Tuesday as it extends the decline off last week’s high. The low-range close sets the stage for a steady to lower opening when Thursday’s night session begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If March extends this week’s decline, December’s low crossing at 4.18 1/2 is the next downside target. Closes above the reaction high crossing at 4.36 are needed to confirm that a short-term low has been posted. Closes above December’s high crossing at 4.40 3/4 are needed to confirm that a seasonal low has been posted. First resistance is December’s high crossing at 4.40 3/4. Second resistance is the reaction high crossing at 4.49 1/2. First support is December’s low crossing at 4.18 1/2. Second support is weekly support crossing at 3.99 3/4.
March wheat closed up 4 3/4-cents at 6.05 1/4. March wheat closed higher due to short covering on Tuesday as it consolidated some of this year’s decline. The high-range close sets the stage for a steady to higher opening when Thursday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off October’s high, weekly support crossing at 5.92 1/2 is the next downside target. Closes above the 20-day moving average crossing at 6.27 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 6.00 1/4. Second resistance is the 20-day moving average crossing at 6.27. First support is today’s low crossing at 5.99. Second support is weekly support crossing at 5.92 1/2.
March soybeans closed down 16 1/4-cents at 12.92 1/2. March soybeans closed lower on Tuesday and below the reaction low crossing at 12.99 1/4 confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening when Thursday’s night session begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If March extends today’s decline, the reaction low crossing at 12.56 1/4 is the next downside target. Closes above the 20-day moving average crossing at 13.16 1/4 are needed to confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 13.16 1/4. Second resistance is the reaction high crossing at 13.39 1/4. First support is today’s low crossing at 12.89 1/4. Second resistance is the reaction low crossing at 12.56 1/4.
