Tuesday, October 29–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

It is a quieter trading week so far as traders and investors are awaiting the results of the U.S. Federal Reserve’s Open Market Committee meeting. The meeting begins Tuesday and ends Wednesday at midday. The FOMC is expected to leave U.S. monetary policy unchanged, but as usual traders and investors will be closely parsing the FOMC statement, looking for any clues on the timing of upcoming changes in policy. Most in the market place believe the Fed will not start to cut back on its monthly bond purchases until early next year—most likely the second quarter at the earliest. This scenario favors the raw commodity market bulls, including the precious metals markets. Any hints at this week’s FOMC meeting that the “tapering” of monetary policy could come sooner than the second quarter of 2014 would likely be bearish for most markets. There is a heavy slate of U.S. economic data due for release Tuesday, which could move the markets. The data includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the producer price index, advance retail sales, the S&P/Case-Shiller home price index, manufacturing and trade inventories, and the consumer confidence index.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early U.S. trading and hovering near Monday’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 the record high of 1,762.00 and then at 1,775.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,752.00 and then at 1,743.20. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are near steady early today and hovering near a 13-year high. 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 last week’s high of 3,392.75 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: 5.5.

Dow futures: Prices are slightly higher early today. Buy stops likely reside just above technical resistance at 15,550 and then at 15,600. Sell stops likely reside just below technical support at 15,500 and then at Monday’s low of 15,475. 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: 5.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today. 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 bearish early today. Shorter-term resistance lies at the overnight high of 135 9/32 and then at last 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 30/32 and then at 134 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 December U.S. T-Notes: Prices are near steady early today. 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 127.21.0 and then at last 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 127.14.0 and then at 127.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The December U.S. dollar index is higher early today on more short covering in a bear market. Bears remain in overall near-term technical control. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 79.750 and then at 80.000. Shorter-term support is seen at the overnight low of 79.355 and then at Monday’s low of 79.205. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

December Nymex crude oil prices are lower early today. Bears have the 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 Monday’s high of $98.82 and then at $99.00. Look for sell stops just below technical support at $97.37 and then at $97.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were narrowly mixed overnight. There has been very good U.S. harvest progress, as reported by the weekly USDA crop progress reports out late Monday. That’s big bearish element that is limiting the upside in corn and soybeans. The weakness in corn and soybeans is spilling over into the wheat market. Rain is coming to the Corn Belt in the coming days, which will delay harvesting. Technically, the corn bears are in firm command, soybean bulls and bears are now on a level near-term technical playing field and wheat bulls still have the slight near-term technical advantage but need to show fresh power soon to keep it.