Friday, October 25–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
There were no major overnight developments to impact U.S. trading Friday. Asian stock markets were weaker on concerns of rising short-term interest rates in China. Japan’s stock market sunk on worries that a stronger yen would crimp Japan’s exports. European stock markets were pressured on a report that business confidence in the leading European Union economy German declined in October for the first time in six months. The Euro currency also backed down from a 23-month high on the negative German Ifo report. Other data from Europe showed U.K. GDP grew at the fastest rate in three years, at up 0.8% in the latest quarter. It could be a quieter trading day in the U.S. Friday, as traders and investors are already looking ahead to next week, when the U.S. Federal Reserve’s Open Market Committee meets and key manufacturing data from China is also out. Also, beginning in November the European Central Bank starts its stress tests on major financial institutions in the EU. U.S. economic data due for release Friday includes the advance durable goods report, the University of Michigan consumer sentiment survey, and wholesale trade inventories.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady in early U.S. trading and hovering near this week’s record high. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9- 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 Tuesday’s record high of 1,754.30 and then at 1,765.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,734.50 and then at 1,726.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are higher early today and hit another 13-year high overnight. 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 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 3,383.25 and then at 3,400.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,368.50 and then at 3,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
Dow futures: Prices are near steady early today. Buy stops likely reside just above technical resistance at 15,500 and then at 15,550. Sell stops likely reside just below technical support at 15,400 and then at Thursday’s low of 15,385. Shorter-term moving averages are bullish early today, as the 4-day moving average is above 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer early today. Bulls still have some 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 the overnight high of 135 12/32 and then at this week’s high of 135 24/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 31/32 and then at 134 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 December U.S. T-Notes: Prices are slightly higher early today. Bulls still have some 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 the overnight high of 127.20.0 and then at this week’s high of 127.25.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 127.11.0 and then at 127.00.0. 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 firmer early today on tepid short covering after hitting another contract low overnight. Bears remain in strong overall near-term technical control. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 79.440 and then at 79.550. Shorter-term support is seen at the overnight contract low of 79.060 and then at 79.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady early today and seeing mild short covering after hitting a nearly four-month low on Thursday. Bears still have the solid overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at the overnight high of $97.65 and then at Wednesday’s high of $98.29. Look for sell stops just below technical support at the overnight low of $96.99 and then at this week’s low of $95.95. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were narrowly mixed overnight. Harvest progress in the U.S. Corn Belt remains a seasonally bearish market factor for corn and soybeans. Wheat remains supported by concerns about the Russian wheat crop and some problems in other wheat-producing regions of the world. Technically, the corn bears are in firm command, soybean bulls have the near-term technical edge, and wheat bulls also have the near-term technical advantage.
