Monday, August 12–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
China’s stock market rallied Monday and hit a two-month high after some recent upbeat economic news and notions the Chinese government wants to inject fresh stimulus measures into its economy. Meantime, Japan’s stock market dropped to a seven-week low on some weak Japanese economic data released Monday. In other overnight news, it was reported that Greece’s economy contracted by 4.6%, year-on-year, in the second quarter. Greece is in its sixth year of economic recession. German officials said Monday they would not back another European Union bailout package for Greece. Reports overnight said gold-backed exchange traded funds saw decent inflows last Friday. The latest Commitments of Traders report from the CFTC shows the funds are starting to get long gold futures again. U.S. economic data due for release Monday is light and includes the monthly Treasury budget statement. A couple of U.S. Federal Reserve officials give speeches this week, which will be closely scrutinized by the market place, for the future direction of Fed monetary policy.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker and hit a two-week low early today on more 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 and 18-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 1,687.00 and then at Friday’s high of 1,696.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,675.40 and then at 1,670.00. 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 on more profit taking. The 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at the overnight high of 3,118.05 and then at Friday’s high of 3,134.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,094.25 and then at last week’s low of 3,090.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are lower early today on more profit taking. Bulls still have the near-term technical advantage. Buy stops likely reside just above technical resistance at 15,375 and then at 15,400. Sell stops likely reside just below technical support at 15,300 and then at 15,250. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day and 18-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: 4.0
U.S. TREASURY BONDS AND NOTES
September 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 and 18-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 last week’s high of 134 20/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 6/32 and then at 134 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are weaker 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 last week’s high of 126.29.0 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.19.5 and then at 126.16.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is higher in early U.S. trading, on short covering. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 81.500 and then at 81.750. Shorter-term support is seen at the overnight low of 81.110 and then at last week’s low of 80.895. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Crude oil prices are near steady early today, on short covering. Bulls have the overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $106.40 and then at $107.00. Look for sell stops just below technical support at $105.00 and then at $104.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mixed in overnight trading. Grain traders are anxiously awaiting the midday-Monday release of the monthly USDA supply and demand report, at which time the government will update its estimate of the size of the U.S. corn and soybean crops this year. Most traders reckon the USDA data will favor the bearish camp. However, it’s still my bias that there is not strong downside price pressure left in the grain markets, after their recent slides lower.
