Tuesday, May 28–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

After a long U.S. holiday weekend, traders will get a full dose of fresh U.S. economic data Tuesday. Due for release Tuesday includes the Chicago Fed midwest manufacturing index, the S&P/Case-Shiller home price index, the consumer confidence index, the Richmond Fed business activity survey, and the Texas manufacturing outlook survey. Following last week’s news events from the U.S. Federal Reserve–Chairman Bernanke’s speech to Congress and the latest FOMC minutes’ release–traders and investors will examine the latest U.S. economic data with a keener sense of whether the economy continues to grow slowly, or is beginning to fade. U.S. stock indexes are set for a higher start to the shortened trading week Tuesday. European stocks were firmer Tuesday, and on Monday. European Central Bank board member Joerg Asmussen on Monday said the ECB will keep its easy monetary policy for as long as necessary. Asian stock markets were also mostly higher Tuesday.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are higher early today as the bulls are working to regain footing after selling pressure late last week. A bearish “key reversal” down on the daily bar chart occurred last week, which is an early clue that a market top is in place. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-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 1,673.00 and then at last week’s high of 1,685.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,650.00 and then at last week’s low of 1,632.70. 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. A bearish “key reversal” down on the daily bar chart occurred in this index last week, which is an early clue that a market top is in place. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-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 the overnight high of 3,023.75 and then at 3,036.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,000.00 and then at the overnight low of 2,985.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher early today as the bulls try to recovery from last week’s bearish “key reversal” down on the daily bar char, which is an early clue that a market top is in place. Buy stops likely reside just above technical resistance at 15,450 and then at 15,500. Sell stops likely reside just below technical support at 15,350 and then at 15,300. Shorter-term moving averages are still 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: 6.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower early today. Bears have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 143 even and then at the overnight high of 143 13/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 142 19/32 and then at last week’s low of 142 9/32. 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. Bears have the near-term technical advantage. 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 the overnight high of 131.12.5 and then at Thursday’s high of 131.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.31.0 and then at last week’s low of 130.28.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The U.S. dollar index is near steady in early U.S. trading. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 84.000 and then at the overnight high of 84.070. Shorter-term support is seen at the overnight low of 83.705 and then at last week’s low of 83.500. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are firmer early today, on short covering. Bulls and bears are on an overall level near-term technical playing field. In July Nymex crude, look for buy stops to reside just above resistance at $95.00 and then at $96.00. Look for sell stops just below technical support at $94.00 and then at the overnight low of $93.23. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mostly firmer in overnight trading. The feature in the grain markets this week will be U.S. Corn Belt weather. It was a very soggy holiday weekend in the central U.S., with heavy rains and flooding. Corn planting is still behind normal in the Corn Belt. The flooding will force some re-planting of corn that was already in the ground, although not likely a significant amount. Corn bulls have gained upside technical momentum recently. Soybean bulls still have the near-term technical advantage, but last week’s price action produced a technically bearish buying exhaustion tail on the daily chart. Wheat remains the weak sister of the grains complex, but will follow corn if that market continues to rally.