Friday, September 27–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, consumer confidence in the European Union rose to its highest level in more than two years during August. The EU’s economic sentiment indicator rose to 96.9 in September versus 95.3 in August. However, European stock markets were weaker due to concerns about the Italian government’s stability amid a fraud scandal involving former prime minister Berlusconi. Asian stock markets were firmer in uneventful action Friday, following Wall Street’s advance Thursday. The main focus of the market place is now on the U.S. budget and debt ceiling impasses that threaten to shut down the U.S. government as soon as next Tuesday. Congress needs to pass a budget by that time and is working on bills. Presently, it’s highly uncertain if the Congress can come to agreement by October 1.  Also, in mid-October the U.S. will hit its borrowing limit. These matters are presently an underlying bearish factor for most markets and could become a major bearish factor in the next couple weeks. Some analysts are saying gold is presently seeing selling interest limited due to some safe-haven demand ahead of the U.S. budget and spending deadlines and the uncertainty of the matter. But other analysts are saying recent selling pressure in gold is because it’s acting like a raw commodity ahead of the budget deadlines. It’s likely one of these scenarios will clearly come to the forefront by early next week. U.S. economic data due for release Friday includes personal income and outlays, and the University of Michigan consumer sentiment survey. A couple more Federal Reserve officials are scheduled to speak Friday, and their comments will be closely watched by the market place.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today. Bulls still have the overall near-term technical advantage but have faded a bit recently. 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 the overnight high of 1,695.20 and then at 1,705.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,675.00 and then at 1,667.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today. 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 early today. Shorter-term technical resistance is located at 3,225.00 and then at this week’s high of 3,237.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 3,202.25 and then at this week’s low of 3,195.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

Dow futures: Prices are weaker early today. Bulls still have the overall near-term technical advantage but are fading. Buy stops likely reside just above technical resistance at 15,261 and then at 15,300. Sell stops likely reside just below technical support at this week’s low of 15,185 and then at 15,125. 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 neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are firmer early today. The bulls have some upside near-term 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 neutral early today. Shorter-term resistance lies at this week’s high of 133 23/32 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 22/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 December U.S. T-Notes: Prices are firmer early today. Prices hit a two-month high Wednesday. The bulls still have 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 neutral early today. Shorter-term resistance lies at this week’s high of 126.10.0 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.00.0 and then at the overnight low of 125.29.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The December U.S. dollar index is weaker early today. Bears remain in overall near-term 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 80.760 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 weaker early today. Bulls are fading. In November Nymex crude, look for buy stops to reside just above resistance at $103.00 and then at $104.00. Look for sell stops just below technical support at this week’s low of $102.20 and then at $102.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed overnight. Soybeans were firmer and corn and wheat were just slightly lower. Wheat bulls are making a good upside move as futures prices Thursday hit multi-week highs. There are early technical clues the wheat markets have put in major lows. Soybean and some corn harvesting are picking up speed this week. Traders are looking ahead to next Monday’s USDA quarterly grain stocks report. That report is expected to be bearish for corn and soybeans. Technically, the soybean bulls still have the overall advantage, but have faded, to begin to suggest a market top is in place. Corn market bears remain in firm technical command.