Wednesday, September 25–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The U.S. budget and debt ceiling issues are moving to the front burner of the market place. The U.S. government will have to at least partially shut down at the end of this month if it does not pass a budget. Also, in mid-October the U.S. will hit its borrowing limit. There has already been harsh rhetoric from both political parties on the matters. A U.S. senator is already filibustering on the U.S. budget. This matter could be significantly bearish for most markets in the coming weeks, as there is already talk some of the U.S. government will shut down for a short time. Traders are awaiting fresh U.S. economic data due for release Wednesday, which includes the weekly DOE energy stocks report, the weekly MBA mortgage applications survey, the advance report on durable goods, and new residential home sales. Recent U.S. economic data has been a mixed bag, with some reports showing modest growth and others suggesting continued stagnation. The recent ambiguous U.S. data seems to tilt in favor of the Federal Reserve continuing its monthly bond-buying program (quantitative easing) for at least a while longer.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower early today, on mild profit taking. Bulls still have the 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 bearish early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 1,701.00 and then at this week’s high of 1,707.40. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,687.70 and then at 1,675.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly lower early today, on mild profit taking. The 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is located at the overnight high of 3,219.25 and then at Tuesday’s high of 3,230.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,198.00 and then at 3,183.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

Dow futures: Prices are slightly lower early today, on more profit taking. Bulls still have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 15,300 and then at Tuesday’s high of 15,365. Sell stops likely reside just below technical support at 15,250 and then at 15,200. Shorter-term moving averages are neutral early today, as the 4-day moving average is below 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: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are higher early today and hit a fresh six-week high overnight. The bulls are gaining upside technical momentum. 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 bullish early today. Shorter-term resistance lies at 133 16/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133 even and then at the overnight low of 132 28/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 December U.S. T-Notes: Prices are firmer early today and hit a fresh two-month high overnight. The bulls have gained upside technical 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 to bullish early today. Shorter-term resistance lies at the overnight high of 126.02.5 and then at the July high of 126.14.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.25.5 and then at Tuesday’s low of 125.16.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The December U.S. dollar index is lower early today. Bears are in technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 80.745 and then at 80.949. Shorter-term support is seen at this week’s low of 80.395 and then at last week’s low of 80.155. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

November Nymex crude oil prices are slightly higher early today, on short covering after hitting a six-week low Tuesday. In November Nymex crude, look for buy stops to reside just above resistance at $104.00 and then at $105.00. Look for sell stops just below technical support at the overnight low of $103.11 and then at Tuesday’s low of $102.30. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were firmer overnight on more short covering. Soybean and some corn harvesting are picking up speed this week. Early yield reports in the U.S. Corn Belt are starting to roll in. Traders are looking ahead to next Monday’s USDA quarterly grain stocks report. Technically, the soybean bulls still have the overall advantage, but have faded, to begin to suggest a market top is in place. Corn and wheat market bears remain in firm technical command. Some export demand for U.S. corn and soybeans is surfacing with those markets at lower price levels.