Thursday, August 29–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place is a bit less risk-averse Thursday. Notions of an imminent U.S. military attack on Syria receded overnight as President Obama said Wednesday he has not decided on a response to the Syrian regime’s alleged use of chemical weapons against civilians. Also, U.S. allies are not in agreement on what to do on the matter. There were no other major developments on the economic or geopolitical front overnight. Traders and investors will focus on U.S. economic data due for release Thursday that includes weekly jobless claims and second-quarter gross domestic product. The long U.S. Labor Day holiday weekend is approaching, so trading volumes in many markets Thursday and Friday are likely to dwindle. However, once U.S. traders come back to work next Tuesday they will have a full plate of matters upon which to ponder. There is an FOMC meeting in September, at which time many believe the U.S. Fed will decided to change its monetary policy. The important U.S. jobs report is out on Friday, September 6. The U.S. congress returns from its summer recess in mid-September and will immediately have to deal with pressing budget matters. And, it’s likely that President Obama early this fall will name a new Federal Reserve chairman.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher early today on a corrective bounce after hitting a seven-week low on Wednesday. Bulls are fading. Prices are in a four-week-old downtrend on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 Wednesday’s high of 1,639.00 and then at 1,650.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,625.00 and then at 1,615.00. 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 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 Wednesday’s high of 3,084.75 and then at 3,100.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,064.00 and then at this week’s low of 3,052.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today. Bulls have faded recently. Prices are in a four-week-old downtrend on the daily bar chart. Buy stops likely reside just above technical resistance at 14,900 and then at 14,930. Sell stops likely reside just below technical support at 14,800 and then at this week’s low of 14,745. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral 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. 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 above the 9-day and 18-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 132 24/32 and then at 133 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 5/32 and then at 132 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are slightly higher early today. 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 above 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 125.13.5 and then at this week’s high of 125.28.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.01.0 and then at 124.24.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The September U.S. dollar index is solidly higher in early U.S. trading, on more short covering and some safe-haven buying. Bulls have gained some fresh near-term technical momentum the past couple days. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 82.000 and then at 82.250. Shorter-term support is seen at 81.500 and then at the overnight low of 81.420. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

October Nymex crude oil prices are lower early today on a corrective pullback after hitting a more than two-year high on Wednesday. Crude bulls still have the solid overall near-term technical advantage. However, the bulls may have become exhausted with the big push higher in prices on Wednesday, given Wednesday’s low-range close. In October Nymex crude, look for buy stops to reside just above resistance at $110.00 and then at $111.00. Look for sell stops just below technical support at the overnight low of $108.60 and then at $107.95. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were slightly lower overnight. The key “outside markets” are bearish for the grains early today as the U.S. dollar index is solidly higher and crude oil prices are lower. There is still high heat and scant rain chances in the U.S. Corn Belt weather forecast for the next several days. That is still bullish for soybeans and corn. Wheat remains overall technically bearish, but will follow corn and soybeans if those markets continue to rally. How the corn and soybean markets close on Friday (near their weekly highs or near their weekly lows) will be a good clue on price direction in those markets in the coming weeks. Closes near the weekly highs would suggest more upside price potential this fall. Closes near the weekly lows could strongly suggest near-term market tops are already in place.