Friday, September 20–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
European markets were quieter in overnight trading and China markets were closed for a holiday. India did surprise the market place with a hike in its key interest rate by 0.25% in an effort to curb inflation and support its currency, the rupee. But overall, the world market place is pausing to catch its breath after a very active 36 hours of trading following the surprise move by the U.S. Federal Reserve on Wednesday to keep in place its $85 billion-a-month bond-buying program. It’s also likely to be a quieter U.S. trading session. There is no major U.S. economic data due for release Friday. However, a few Federal Reserve officials are scheduled to give speeches Friday, which will be closely scrutinized. European traders and investors are awaiting the results of German elections on Sunday. Chancellor Angela Merkel is expected to win a third term, but the election could also be very close. The U.S. budget and debt ceiling issues are looming and will be hotly debated by the U.S. Congress and the Obama administration the next few weeks. This will become a front-burner matter for the market place, and one that could be significantly bearish for most markets, as there is already talk the U.S. government could shut down for a short time.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today after hitting a record high Thursday. Bulls 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 neutral early today. Today, shorter-term technical resistance comes in at Thursday’s all-time high of 1,726.50 and then at 1,735.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 1,713.50 and then at 1,705.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are firmer early today and hovering close to Thursday’s 12-year high. The bulls 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. 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 Thursday’s high of 3,237.75 and then at 3,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 3,224.50 and then at 3,200.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are near steady early today and pausing after prices Wednesday hit an all-time high. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at 15,600 and then at the record high of 15,650. Sell stops likely reside just below technical support at 15,500 and then at 15,450. 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 early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are near steady early today. Bears still 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 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 131 20/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131 even and then at 130 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 December U.S. T-Notes: Prices are near steady early today. Bears still have the overall near-term technical advantage. However, the bulls have gained upside momentum this week. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 125.14.0 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 125.00.0 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 December U.S. dollar index is slightly lower early today. Prices are hovering near this week’s 7.5-month low. Bears are in technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 80.560 and then at 80.750. Shorter-term support is seen at this week’s low of 80.155 and then at 80.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly lower early today. Trading has turned choppy this week but the crude oil bulls have the overall near-term technical advantage. In November Nymex crude, look for buy stops to reside just above resistance at the overnight high of $106.11 and then at $107.00. Look for sell stops just below technical support at $105.00 and then at this week’s low of $104.40. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were weaker overnight on a lack of fresh, bullish fundamental news. Early yield reports on the harvesting of the U.S. corn and soybean crops in the Corn Belt will start to really roll in next week. Technically, the soybean bulls still have the overall advantage, while corn and wheat market bears are in firm technical command. My bias is that the corn and wheat markets do not have strong downside price potential at present levels. It’s also my bias that soybeans will trade sideways to lower in the coming weeks.
