Thursday, June 27–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place is a bit calmer Thursday morning. Wednesday’s weaker-than-expected final revision to U.S. first-quarter gross domestic product—at up 1.8% on an annual basis versus the previous estimate of up 2.4%—did suggest to many market watchers worldwide that the Federal Reserve cannot be too heavy on the brakes in tapering its very easy monetary policy. Still, the trend of U.S. economic data released recently has been for stronger data, and most traders and investors still believe the Fed will start to back off on its quantitative easing of monetary policy by the end of this year. Such has been a significantly bearish weight on the raw commodity sector the past week, while giving the U.S. dollar index a solid boost. Asian stock markets were mostly higher Thursday, following Wall Street’s good gains on Wednesday. European stock markets were weaker Thursday, but losses were pared after better-than-expected German unemployment and Euro zone consumer confidence data were released. U.S. economic data due for release Thursday includes weekly jobless claims, the Chicago Fed Midwest manufacturing index, personal income and outlays, the pending home sales index, and the Kansas City Fed manufacturing survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today. Bulls are regaining some near-term momentum, but have more work to do to suggest an uptrend can be re-established. The shorter-term moving averages (4-, 9- and 18-day) are still 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 to bullish early today. Today, shorter-term technical resistance comes in at 1,610.00 and then at 1,620.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,585.00 and then at Wednesday’s low of 1,573.30. 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 are working to regain upside momentum, but have more heavy lifting to do in the near term to suggest prices can trend higher. The shorter-term moving averages (4- 9-and 18-day) are still 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 the overnight high of 2,894.50 and then at 2,900.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,875.00 and then at 2,860.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are firmer early today. Bulls are regaining some upside momentum late this week, but have more work to do to suggest prices can begin to trend higher. Buy stops likely reside just above technical resistance at 14,900 and then at 14,915. Sell stops likely reside just below technical support at 14,800 and then at Wednesday’s low of 14,755. 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 bullish 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 more short covering in a bear market. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 135 14/32 and then at this week’s high of 135 22/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 21/32 and then at 134 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are higher early today on more short covering. Bears still 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at this week’s high of 126.17.5 and then at 126.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.02.0 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 profit taking after prices hit a three-week high on Wednesday. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.235 and then at Wednesday’s high of 83.275. Shorter-term support is seen at 83.000 and then at Wednesday’s low of 82.735. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are firmer early today. Trading has been choppy recently. Bulls and bears are still 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 $96.14 and then at $97.00. Look for sell stops just below technical support at $95.00 and then at $94.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mostly firmer in overnight trading. Short covering and pre-report position evening are and likely will be featured Thursday and early Friday. There is a USDA report out late Friday morning, which will update planted acres figures for corn and soybeans. This USDA report will be one of the more important ones of the year. The grain market bulls have faded recently amid the generally bearish attitudes in the raw commodity sector at present. Weather in the U.S. Corn Belt remains benign at present. However, many areas in the central Corn Belt remain too wet (Iowa and Minnesota), which has prevented planting of corn and soybeans, or stunted their early growth.
