Friday, June 21–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place is a bit calmer as trader attention moves to the U.S. stock market opening Friday morning. Asian stocks followed Wall Street’s lower price action Thursday. Asian stocks were also pressured by worries about a financial liquidity problem occurring in China as interest rates there have surged recently. Some weaker economic data out of China Thursday also spooked the Asian markets. Japan’s Nikkei did manage to post gains Friday. European markets stabilized and were showing modest corrective bounces from Thursday’s selling pressure. There are some fresh financial problems surfacing in Greece late this week, which have driven the Greek 10-year bond yield above 11%. There has been a strong flow of investment monies out of emerging markets recently. In fact, it appears most of the world market place is moving more into cash, as evidenced by most markets selling off late this week. There’s an old market adage that says when the going gets rough, if you can’t sell what you want, you sell what you can. The market place is still digesting Wednesday’s U.S. Federal Reserve events, in which traders and investors generally decided the Fed will begin to wind down its monthly bond-buying program (quantitative easing) by the end of this year. Most markets did not take well that dose of news, even though it would be a stretch to call the Fed action Wednesday surprising. There is no major U.S. economic data due for release Friday.–Jim U.S.
STOCK INDEXES
S&P 500 futures: Prices are higher early today, on a corrective bounce from selling pressure Thursday that saw prices fall to a seven-week low. Bears still have some near-term momentum on their side. 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 early today. Today, shorter-term technical resistance comes in at 1,600.00 and then at 1,610.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,583.00 and then at Thursday’s low of 1,578.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are higher early today on a corrective bounce from Thursday’s dive to a seven-week low.Bulls have lost their overall near-term technical advantage. 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 2,910.50 and then at 2,925.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 2,875.75 and then at 2,857.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are firmer early today on a technical bounce after prices Thursday fell to a seven-week low. Bulls have lost their overall near-term technical advantage. Buy stops likely reside just above technical resistance at 14,800 and then at 14,850. Sell stops likely reside just below technical support at 14,700 and then at the Thursday’s low of 14,655. 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 to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly higher early today on tepid short covering in a bear market. Prices Thursday hit a contract low. Bears still have the solid overall near-term technical advantage. Prices are in a seven-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 to bearish early today. Shorter-term resistance lies at the overnight high of 136 22/32 and then at 137 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 26/32 and then at the contract low of 135 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are near steady early today on tepid short covering after hitting a contract low on Thursday. Bears have the strong 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. 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 127.12.0 and then at Thursday’s high of 127.20.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.30.5 and then at the contract low of 126.20.5 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. Prices have made a very strong rebound from Wednesday’s four-month low, to suggest a near-term market low is in place. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 82.320 and then at 82.500. Shorter-term support is seen at 82.000 and then at the overnight low of 81.765. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are firmer early today, on a corrective bounce from very strong selling pressure Thursday. Bears still have downside momentum on their side. In August Nymex crude, look for buy stops to reside just above resistance at $96.00 and then at $97.00. Look for sell stops just below technical support at $95.00 and then at Thursday’s low of $94.63. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were lower in overnight trading, pressured by the general bearish attitudes in the raw commodity sector at present, which have at least temporarily superseded specific grain market fundamentals. But this situation won’t last long—unless the market place becomes more unnerved next week. The critical early-July timeframe for the grain markets is approaching, and that could promp short covering and fresh speculative buying interest in the grains next week.
