Wednesday, May 29–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Rising U.S. Treasury bond and note yields have caught the attention of the market place this week. The 10-year U.S. T-Note yield rose to 2.17% Tuesday, the highest in over a year. The rapidly rising Treasury yields are a clue that the market place now believes there is light at the end of the tunnel of the Federal Reserve’s years-old, aggressive monetary stimulus programs. There has been a recent run of better-than-expected U.S. economic data that also supports notions the Fed could lighten up on its big monthly bond-buying program. European stocks were weaker overnight, pressured in part on a downbeat German employment report. A report from the OECD said the Euro zone will see a deeper-than-expected economic contraction this year than it saw last year. Asian stock markets were mostly firmer overnight, following the lead of the stronger U.S. stock market on Tuesday. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are lower early today on profit taking. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,656.60 and then at Monday’s high of 1,672.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,632.70 and then at 1,625.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index futures: Prices are lower early today on profit taking. 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 bearish early today. Shorter-term technical resistance is located at 3,000.00 and then at the overnight high of 3,008.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,975.00 and then at last week’s low of 2,961.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
Dow futures: Prices are lower early today on profit taking. Buy stops likely reside just above technical resistance at 15,300 and then at 15,350. Sell stops likely reside just below technical support at 15,250 and then at 15,200. 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: 4.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower early today and hit a fresh contract low overnight. Bears have the solid 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 the overnight high of 140 4/32 and then at 140 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 139 16/32 and then at the overnight low of 138 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 September U.S. T-Notes: Prices are lower early today and hit a fresh contract low overnight. Bears have the solid 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 129.09.0 and then at 129.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 129.00.0 and then at the overnight low of 128.19.5. 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 lower in early U.S. trading and scoring a bearish “outside day” down on the daily bar chart. Profit taking is featured. 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 84.430. Shorter-term support is seen at last week’s low of 83.500 and then at 83.325. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are lower early today as trading has turned choppy. 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 Tuesday’s low of $93.23. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were weaker in overnight trading. Profit taking is featured in corn and soybean futures markets. Both saw good gains Tuesday on soggy U.S. Corn Belt weather that is causing planting delays. The feature in the grain markets will continue to be Corn Belt weather. Corn and soybean bulls still have upside technical momentum on their side. Wheat futures continue to languish at lower price levels as the bears remain in control.
