Wednesday, June 19–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Asian and European stock markets were mixed again overnight, and in a holding pattern. The market place anxiously awaits the results of the U.S. Federal Reserve’s Open Market Committee (FOMC) that concludes early Wednesday afternoon. Fed Chairman Ben Bernanke will also hold a press conference following the FOMC announcement that will occur at 2:00 p.m. EDT. Traders and investors will be looking for fresh information from the Fed on if, when and by what degree it will start to wind down its quantitative easing programs that have been in place for several years. The keener uncertainty ahead of this particular FOMC meeting arises from the wide range of expert opinions on just what path the U.S. central bank will take in its monetary policy. It appears the slight majority of market watchers believe the Fed will stand pat for the time being on its monetary policy. However, recent slightly better U.S. economic data has led to ideas the Fed will soon begin to lay the groundwork for its eventual exit from quantitative easing of monetary policy. There is also even a bit of uncertainty regarding how long it will be before Bernanke announces his intentions on whether he stays or leaves his top spot at the Fed. Most Fed watchers believe he’s been beaten up enough that he will not stay around for another term. There is civil unrest in Turkey and Brazil that traders and investors are monitoring. If the situations there see an escalation and violence in the streets, the gold market could see some safe-haven demand surface. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report, and the FOMC interest rate decision.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly higher early today and poked to a fresh three-week high overnight. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 1,650.00 and then at 1,680.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,641.60 and then at Tuesday’s low of 1,632.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are firmer early today. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at 3,000.00 and then at the June high of 3,007.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,986.25 and then at 2,975.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly higher early today. Buy stops likely reside just above technical resistance at Tuesday’s high of 15,270 and then at 15,300. Sell stops likely reside just below technical support at 15,200 and then at Tuesday’s low of 15,174. Shorter-term moving averages are neutral early today, as the 4-day moving average is above 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: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady early today. Bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. 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 early today. Shorter-term resistance lies at Tuesday’s high of 139 26/32 and then at 140 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 139 14/32 and then at 139 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are slightly lower early today. Bears have the near-term technical advantage. 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 bearish early today. Shorter-term resistance lies at the overnight high of 129.10.0 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 Tuesday’s low of 128.30.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading and did hit a fresh four-month low overnight. Bears have the near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.885 and then at 81.000. Shorter-term support is seen at the overnight low of 80.685 and then at 80.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are slightly higher early today and hi a fresh four-month high overnight. Bulls have some upside momentum and have the overall near-term technical advantage. In August Nymex crude, look for buy stops to reside just above resistance at the overnight high of $99.21 and then at $100.00. Look for sell stops just below technical support at the overnight low of $98.47 and then at $98.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were narrowly mixed in overnight trading. Corn market bulls are gaining a bit of upside momentum this week. Soybean bulls still have the slight overall near-term technical advantage. Wheat bears have the solid near-term technical edge. Look for the grain markets to be impacted by Wednesday afternoon’s FOMC decision. The “seasonality” of the grain markets shows that a critical timeframe is approaching—the first week in July. That is a period of time where price trends in the grain can reverse, or existing price trends can accelerate. July will be a very important month for determining the direction of grain futures market prices for the next several months.
