Friday, November 29–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, the number of unemployed in the European
Union dropped to its lowest annual level since April of
2011, at 12.1% in October from 12.2% in September. Meantime,
the inflation rate in the EU rose to 0.9% in November from
0.7% in October, on an annual basis. This data somewhat
assuages recent fears the EU is slipping into a deflationary
period.
Otherwise, it was a quiet trading affair in Asia and Europe
on Friday. The U.S. stock market and some other markets
close early on Friday, following the U.S. Thanksgiving
holiday on Thursday. There is no major U.S. economic data
due for release on Friday.
There was an “incident” earlier this week when U.S. military
planes purposely flow over some islands in the East China
Sea, which China now claims as its own, but Japan also
claims it owns. China had just sent out a dispatch saying
those islands were now under its airspace watch. China has
sent its only aircraft carrier to the region of the islands.
One U.S. military official called China’s lone aircraft
carrier a floating museum, in which a Chinese plane has
apparently never been launched from it. Right now, this
situation is not a major market factor, but it does bear
watching over the weekend.
Focus of traders and investors is turning to December, when
the European Central Bank and U.S. Federal Reserve hold
their next monetary policy meetings. The market place for
many weeks has been preoccupied with the precise timing of
when the Fed will alter its monetary policy and back off
from its monthly bond-buying program—called quantitative
easing. Meantime, the ECB has just eased its monetary policy
and the market place is wondering what ECB president Mario
Draghi will have up his sleeve at next week’s ECB meeting.
Wyckoff’s Daily Risk Rating: 6.0 (It will be a quieter,
post-holiday market place Friday, but the weekend and the
China news places just a bit more risk aversion in the
market place.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge
investor risk appetite in the world market place each day.
Each day I assess the “risk-on” or “risk-off” trader
mentality in the market place with a numerical reading of 1
to 10, with 1 being least risk-averse (most risk-on) and 10
being the most risk-averse (risk-off), and 5 being neutral.
–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly higher in early U.S.
trading and hit another record 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. 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
overnight record high of 1,809.70 and then at 1,825.00. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at this week’s
low of 1,799.00 and then at 1,792.20. Sell stops are likely
located just below those levels. Wyckoff’s Intra-day Market
Rating: 5.5
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. The 9-day average is
above the 18-day. Short-term oscillators (RSI, slow
stochastics) are neutral to bullish early today. Shorter-
term technical resistance is located at 3,500.00 and then at
3,515.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at the overnight
low of 3,468.75 and then at 3,450.00. Sell stops are likely
located just below those levels. Wyckoff’s Intra-Day Market
Rating: 6.5.
Dow futures: Prices are higher early today and hit another
record high overnight. Buy stops likely reside just above
technical resistance at 16,150 and then at 16,200. Sell
stops likely reside just below technical support at Friday’s
low of 16,045 and then at 16,000. 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: 6.0
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are weaker early today. The bears
have the overall near-term technical advantage as prices are
in a choppy, four-week-old downtrend on the daily bar chart.
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 early today. Shorter-
term resistance lies at the overnight high of 130 24/32 and
then at 131 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the overnight
low of 130 8/32 and then at 130 even. Sell stops likely
reside just below those levels. Wyckoff’s Intra-Day Market
Rating: 4.0
March U.S. T-Notes: 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. 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 125.14.5 and then
at Wednesday’s high of 125.23.0. Buy stops likely reside
just above those levels. Shorter-term technical support
lies at this week’s low of 125.04.0 and then at 125.00.0.
Sell stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The March U.S. dollar index is lower early today. The
greenback bears have the overall near-term technical
advantage amid recent choppy trading. Slow stochastics for
the dollar index are bearish early today. The dollar index
finds shorter-term technical resistance at the overnight
high of 80.805 and then at 81.000. Shorter-term support is
seen at this week’s low of 80.675 and then at 80.500.
Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
January Nymex crude oil prices are firmer early today on
tepid short covering after hitting a five-month low on
Wednesday. Bears have the overall near-term technical
advantage. Prices are in a three-month-old downtrend on the
daily bar chart. In January Nymex crude, look for buy stops
to reside just above resistance at $93.00 and then at
Wednesday’s high of $93.60. Look for sell stops just below
technical support at $92.00 and then at this week’s low of
$91.77. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were closed overnight. Grain traders will closely
scrutinize this morning’s weekly USDA export sales report.
The South American planting and growing season for corn and
soybeans is now a market factor. So far, weather conditions
in South America are favorable, which is a bearish
underlying factor for soybeans and to a lesser degree corn.
Technically, corn bears are in firm command. Soybean bulls
have the near-term technical advantage, and wheat bears
remain in full technical control.
