Tuesday, July 30–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Asian and European stock markets were firmer overnight in subdued trading, as key worldwide economic data points are approaching fast. The highlights this week are the U.S. Federal Reserve’s FOMC meeting that begins Tuesday and the U.S. employment report Friday. Most expect the Fed will leave its monetary policy unchanged and continue to lean well to the dovish side at this week’s meeting. Many Fed watchers are actually looking ahead to the next FOMC meeting, in September, at which time the central bank could begin its much-anticipated “tapering” of its monthly bond-buying program, also called quantitative easing. For the U.S. jobs report, the key non-farm payrolls figure is forecast to rise by around 175,000 workers in July. The overall unemployment rate is expected to have declined by 0.1%, to 7.5%. The U.S. gross domestic product reading for the second quarter will also be released Wednesday. European traders are awaiting the European Central Bank and Bank of England monthly meetings that occur on Thursday. Asian traders and investors are awaiting manufacturing data from China, due out Thursday. The European Union did see its overall consumer confidence rise to the highest level in over a year, it was reported Tuesday. At present, the EU sovereign debt problems are pushed to the back burner of the market place, but have not just disappeared. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, and the consumer confidence index.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today. Bulls have the solid 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at last week’s high of 1,695.50 and then at 1,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,682.00 and then at Monday’s low of 1,677.00. 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. The bulls have the 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at Monday’s high of 3,078.50 and then at the July high of 3,087.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,065.50 and then at Monday’s low of 3,056.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
Dow futures: Prices are firmer early today. Bulls 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 Monday’s low of 15,430 and then at 15,400. 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 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 lower early today. Bears 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 to bearish early today. Shorter-term resistance lies at the overnight high of 134 8/32 and then at 134 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 133 26/32 and then at 133 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are slightly lower early today. 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 bearish early today. Shorter-term resistance lies at the overnight high of 126.20.0 and then at Monday’s high of 126.26.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.12.0 and then at 126.03.0 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 slightly higher in early U.S. trading. 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 81.940 and then at 82.000. Shorter-term support is seen at Monday’s low of 81.610 and then at 81.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are lower early today and hit a fresh three-week low overnight. Bulls still have the overall near-term technical advantage but have faded. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $104.54 and then at $105.00. Look for sell stops just below technical support at the overnight low of $103.56 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were firmer in overnight trading, on short covering following recent selling pressure. However, the grain market bears are still on the prowl and have near-term power. The U.S. Corn Belt weather has turned non-threatening for the corn and corn and soybean crops and that’s bearish. Cash basis levels for corn and soybeans have also weakened significantly. The important outside market events that occur this week could have a significant impact on grain prices—the FOMC data and jobs report.
