Tuesday, June 25–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
There is a bit more risk appetite in the world market place Tuesday. China central bank officials reportedly said Tuesday that the cash crunch in China has been brought under control and the recent volatility in its financial markets was just temporary. Worries that the financial system in the world’s second-largest economy could seize up had the entire world market place jittery the past few days. Asian stock markets rebounded well off their daily lows on the news, while European stock markets saw gains. There were also reports that several officials of the major central banks of the world in the past 24 hours have made more dovish and less hawkish remarks on their monetary policies. This follows last week’s hawkishly perceived FOMC meeting of the U.S. Federal Reserve. There was also a report in a European newspaper Tuesday quoting an Italian bank as saying it’s likely Italy will soon need another financial bailout package as the Italian economy continues to suffer and as credit in that nation is drying up. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, durable goods orders, the Case-Shiller home price index, new residential sales, the consumer confidence index, and the Richmond Fed business survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today, on a corrective bounce from recent selling pressure that saw prices fall Monday to a two-month 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,577.40 and then at Monday’s high of 1,585.90. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,558.40 and then at Monday’s low of 1,553.80. 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 Monday’s move to a two-month 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 to bullish early today. Shorter-term technical resistance is located at Monday’s high of 2,870.75 and then at 2,885.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,830.75 and then at Monday’s low of 2,817.75. 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 Monday fell to a two-month low. Bulls have lost their overall near-term technical advantage. Buy stops likely reside just above technical resistance at Monday’s high of 14,680 and then at 14,700. Sell stops likely reside just below technical support at 14,588 and then at 14,550. 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer early today on tepid short covering in a bear market. Prices Monday hit a contract low. Bears still have the solid overall near-term technical advantage. Prices are in a two-month-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 bullish early today. Shorter-term resistance lies at the overnight high of 135 22/32 and then at 136 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 27/32 and then at 134 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are firmer early today on tepid short covering after hitting a contract low on Monday. Bears still 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 bullish early today. Shorter-term resistance lies at the overnight high of 126.17.5 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.00.0 and then at 125.24.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker in early U.S. trading, on a corrective pullback from strong gains seen recently. Prices Monday hit a three-week high. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.71 and then at Monday’s high of 83.050. Shorter-term support is seen at the overnight low of 82.440 and then at 82.250. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are firmer early today, on a corrective bounce from recent selling pressure. Bulls and bears are on an overall level near-term technical playing field. In August Nymex crude, look for buy stops to reside just above resistance at the overnight high of $96.09 and then at $97.00. Look for sell stops just below technical support at $95.00 and then at the overnight low of $94.59. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were higher in overnight trading, on short covering from recent selling pressure. The grain market bulls have faded amid the generally more bearish attitudes in the raw commodity sector at present. Weather in the U.S. Corn Belt remains benign. However, many areas in the central Corn Belt remain too wet, which has prevented planting of corn and soybeans. 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 in the coming days. There is a USDA supply and demand report out Friday morning, which will also update planted acres figures for corn and soybeans. This USDA report will be one of the more important ones of the year.
