Friday, July 26–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
It’s another quiet, summertime trading affair Friday morning. There has been a lack of major, market-moving news late this week. Traders and investors are looking ahead to next week, when the U.S. Federal Open Market Committee meets and the U.S. employment report is released. With August right around the corner, trading volumes in many markets are likely to decline as summertime family vacations take many traders away from the markets. The European stock markets were weaker overnight as focus there is on corporate earnings. Asian stocks were mixed, with Japan’s Nikkei stock index down and China’s Shanhai were higher. The International Monetary Fund (IMF) reported Friday that central banks in emerging market countries continued to add to their gold reserves in June. Russia was also a buyer, while Germany was reported as a seller of gold last month. The gold market bulls who have done some bargain hunting at lower price levels recently have to feel pretty good about the fact that central banks of sovereign nations are doing the same. U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early today on some mild profit-taking pressure. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above 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 1,688.50 and then at this week’s high of 1,695.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 1,672.00 and then at 1,666.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are slightly lower early today on profit taking. The 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 below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at this week’s high of 3,060.00 and then at 3,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,035.00 and then at this week’s low of 3,023.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early today on profit taking. Bulls still have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at 15,500 and then at the record high of 15,545. Sell stops likely reside just below technical support at 15,400 and then at 15,350. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-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: 4.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher early today on short covering. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 134 19/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 7/32 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 firmer early today on short covering. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 126.22.0 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.14.5 and then at 126.08.0 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 lower in early U.S. trading and hit a fresh five-week low overnight. Bears have the overall 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 81.915 and then at 82.000. Shorter-term support is seen at the overnight low of 81.670 and then at 81.500. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are lower again early today, on more profit taking. Bulls still have the overall near-term technical advantage, but are fading. In September Nymex crude, look for buy stops to reside just above resistance at $105.00 and then at the overnight high of $105.63. Look for sell stops just below technical support at this week’s low of $104.08 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were narrowly mixed in overnight trading, on some short covering from recent strong selling pressure. Corn and wheat futures are in strong bear markets, while soybeans have also entered bearish territory late this week. The U.S. Corn Belt weather has turned benign for the corn and soybean crops, and that’s bearish. Cash corn and soybean basis levels in the central U.S. have collapsed this week, which adds to the bearish tone in the futures markets. The one bright spot in the grain markets at present is good world demand for U.S. grains. My bias is that there is not strong downside price pressure left in the grain markets.
