Friday, October 26–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

(Note: I was out of the office Wednesday and Thursday, speaking at a precious metals investment symposium in New Orleans. I know I have a great job when I can’t wait to get back home to once again serve you, my valued reader.–Jim)

It’s a “risk-off” day in the market place early Friday. The European and Asian stock markets were lower following more disappointing U.S. earnings reports (Apple, Amazon) and in the wake of a move by the Standard & Poors credit rating agency to downgrade the French bank BNP Paribas, as well as lower its outlook for two other French banks– Societe Generale and Credit Agricole. The agency said it economic
conditions are deteriorating in France and southern Europe. Meantime, Greece remains in a precarious financial condition, needing more bailout funds than expected in the near term, as the European Union leaders try to figure out the next step to take on that matter. And reports overnight said a European Central Bank official said Italy’s banking sector is under severe strains. All of the above have pressured the Euro currency and supported buying interest in the U.S. dollar. The market place is girding for Friday morning’s release of the U.S. advance third-quarter gross domestic product report. That report is expected to show the U.S. economy grew at a rate of 1.8%, on an annual basis, in the third quarter. Any number that deviates from the expected figure is likely to move the markets. OtherU.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today and hit a fresh 10-week low overnight. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,409.40 and then at Thursday’s high of 1,416.70. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,394.70 and then at 1,380.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0

Nasdaq index futures: Prices are lower and hit a 2.5-month low 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. 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 2,654.25 and then at Thursday’s high of 2,673.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,625.00 and then at the overnight low of 2,604.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Dow futures: Prices hit a fresh 10-week low overnight as bulls are fading. Sell stops likely reside just below technical support at 12,900 and then at 12,850. Buy stops likely reside just above technical resistance at 13,000 and then at 13,050. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are higher early today, on short covering nd some fresh safe-haven demand. Trading has turned choppy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 148 even and then at this week’s high of 148 4/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 147 even and then at the overnight low of 146 19/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

December U.S. T-Notes: Prices are higher early today on short covering and safe-haven buying. Shorter-term moving averages (4- 9- 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 132.16.0 and then at 132.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.00.0 and then at this week’s low of 131.22.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The December U.S. dollar index is firmer in early U.S. trading today and hit a fresh six-week high overnight. While bears still have the overall near-term technical advantage, the bulls are gaining upside momentum this week. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 80.59 and then at 80.75. Shorter-term support is seen at the overnight low of 80.08 and then at Thursday’s low of 79.77. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are weaker early today and are hovering near a 13-week low hit this week. Bears have the overall near-term technical advantage as a downtrend on the daily bar chart has been re-established. In December Nymex crude, look for buy stops to reside just above resistance at the overnight high of $86.29 and then at $87.00. Look for sell stops just below technical support at this week’s low of $84.94 and then at $84.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were weaker in overnight trading, on some profit taking and chart consolidation from recent gains. The key outside markets are also in a bearish posture for the grains early today, as the U.S. dollar index is firmer and crude oil prices are lower.