Friday, August 30–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Notions of an imminent U.S. military attack on Syria have receded significantly the past 48 hours, as U.S. allies are backing away from supporting or participating in such an endeavor. The U.S.’s staunchest ally, the U.K., saw its parliament late Thursday vote down U.K. use of force against the Syrian regime. Now, the U.S. must decide if it will go it alone on a military operation against Syria and risk the resulting consequences, or back off its threats and risk another set of consequences for doing nothing. This has the world market place a bit calmer than earlier this week, which in turn has put downside price pressure on safe-haven assets like gold and U.S. Treasuries. There was a fresh batch of European Union economic data released overnight, most of which was upbeat. The number of unemployed in the Euro zone in July fell for the second month in a row. However, the overall unemployment rate in the region was still an all-time high of 12.1%. Meantime Euro zone consumer inflation fell to 1.3% in August from 1.6% in July, on an annual basis. Next week comes a slew of bond issuances from European Union countries. Those auctions will be closely scrutinized for investor demand. The long U.S. Labor Day holiday weekend is approaching, so trading volumes in many markets Friday are likely to be light. Friday is the last trading day of the month, too. 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. There is also a Group of 20 nations meeting next week. 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. U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.–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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,644.80 and then at 1,650.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’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 to bullish early today. Shorter-term technical resistance is located at Thursday’s high of 3,109.00 and then at 3,125.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,088.75 and then at 3,075.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly higher 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 Thursday’s high of 14,895 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 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 above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 133 1/32 and then at this week’s high of 133 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 18/32 and then at 132 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 September U.S. T-Notes: Prices are weaker 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 125.16.0 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 125.08.5 and then at 125.00.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is near steady in early U.S. trading. Bulls have gained fresh near-term technical momentum as prices hit a four-week high on Thursday. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 82.270 and then at 82.500. Shorter-term support is seen at 81.750 and then at 81.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are lower early today on more corrective downside pressure after hitting a more than two-year high on Wednesday. Crude bulls still have the overall near-term technical advantage. However, the bulls may have become exhausted with this week’s big push higher in prices. In October Nymex crude, look for buy stops to reside just above resistance at $109.00 and then at $110.00. Look for sell stops just below technical support at $107.40 and then at the overnight low of $106.75. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were lower overnight. There are still hot temps and little rain chances in the U.S. Corn Belt weather forecasts for the next week. 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 today (near their weekly highs or near their weekly lows) will be a good clue on price direction in those markets in the coming weeks. Weekly closes near the middle of the weekly trading ranges would be insignificant. 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.
