Monday, September 23–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
German elections on Sunday saw Chancellor Angela Merkel win a third term. The result is what the market place expected. The data provider Markit on Monday said its monthly gauge of business activity in the European Union rose in September to 52.1, the highest level in over two years. August showed a 51.5 figure. A reading above 50.0 suggests growth. European stocks were mostly firmer Monday on the aforementioned news.In China overnight, the HSBC manufacturing PMI rose to a six-month high of 51.2 in September, compared to a reading of 50.1 in August. This report continued a string of generally upbeat economic news coming out of the world’s second-largest economy. Japanese markets were closed for a holiday Monday, while Hong Kong shut down early due to a typhoon. Other Asian stock markets were firmer Monday. The market place continues to reflect upon last week’s surprise move by the U.S. Federal Reserve to not start to wind down its monthly bond-buying program. Traders and investors are awaiting fresh clues from the Fed on its future monetary policy moves, especially the timing of such moves. Fed official James Bullard last Friday said the Fed could announce a “tapering” move as soon as its October FOMC meeting. There are several Federal Reserve officials speaking this week, including three today, and their comments will be closely scrutinized by the market place. 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. U.S. economic data due for release Monday includes the Chicago Fed national activity index and the U.S. flash manufacturing PMI.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly higher early today. 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 neutral early today. Today, shorter-term technical resistance comes in at Friday’s high of 1,718.40 and then at last week’s all-time high of 1,726.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,693.50 and then at last week’s low of 1,687.90. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are firmer early today and hovering not far below last week’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 the overnight high of 3,230.25 and then at last week’s high of 3,241.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,215.75 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 slightly higher early today. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 15,450 and then at 15,500. Sell stops likely reside just below technical support at 15,346 and then at 15,300. 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: 5.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly lower early today. Bears still have the overall near-term technical advantage. 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 131 28/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 13/32 and then at 131 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 December U.S. T-Notes: Prices are weaker early today. Bears have the overall near-term technical advantage. However, the bulls have gained some upside momentum recently. 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 125.13.5 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 Friday’s low of 124.29.5 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower early today. Prices are hovering not far above last 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 Friday’s high of 80.685 and then at 80.949. Shorter-term support is seen at the overnight low of 80.395 and then at last week’s low of 80.155. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady early today. Prices hit a three-week low overnight. In November Nymex crude, look for buy stops to reside just above resistance at the overnight high of $105.12 and then at $105.00. Look for sell stops just below technical support at the overnight low of $104.10 and then at the September low of $103.74. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were narrowly mixed overnight. Soybean and some corn harvesting will pick up speed this week. Focus will be on early yield reports in the U.S. Corn Belt. Technically, the soybean bulls still have the overall advantage, but are fading a bit. Corn and wheat market bears remain 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.
