*Latest Market Developments*
Many markets were subdued overnight as traders and investors await Friday’s U.S. Labor Department employment report. The report is forecast to see a rise in non-farm payrolls of 230,000 in July versus up 288,000 in June.
Wednesday afternoon’s results of the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) showed the FOMC will continue to taper its monthly bond-buying program (quantitative easing) by slicing another $10 billion per month from the program. The move was not surprising and the markets showed little reaction.
In overnight news, the July consumer price index in the European Union rose 0.4%, year-on-year, and is the lowest reading since 2009. The June CPI came in at up 0.5%. These figures are well below the European Central Bank’s target of 2.0% annual inflation in the EU.
Also in European trading, the troubled Portuguese bank, Banco Espirito, saw its stock price fall 40% after the bank reported a record loss in the second quarter.
Argentina is set to default on another sovereign debt obligation after negotiations between creditors and government officials collapsed. This news is not surprising and has had no major markets impact, so far.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cut report, and the Chicago ISM business survey.
The market place is still monitoring geopolitical issues. The European Union and U.S. this week have slapped new and harsher sanctions on Russia. Meantime, the Israel-Hamas conflict is not de-escalating. These matters will continue to be not far from the front burner of the market place in the near term.
Wyckoff’s Daily Risk Rating: 7.0 (Geopolitics are at play in the market place, but for now traders and investors are also a bit numb to those matters.)
(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 Wyckoff
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are lower in early trading, on profit taking, and hit a two-week low overnight. 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 1,965.50 and then at this week’s high of 1,979.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,947.75 and then at the July low of 1,942.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index futures: Prices are lower in early trading today, on profit taking. 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 seen at 3,950.00 and then at the overnight high of 3,965.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,930.75 and then at 3,920.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
Dow futures: Prices are lower and hit a four-week low in early U.S. trading. Bulls have faded recently. Buy stops likely reside just above technical resistance at 16,734 and then at 16,800. Sell stops likely reside just below technical support at 16,700 and then at 16,650. 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 slightly lower early today and seeing some more profit taking after hitting a contract high on Tuesday. Bulls still have the overall near-term technical advantage but are fading a bit now. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 137 24/32 and then at 138 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 9/32 and then at 137 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are slightly lower in early trading. Bulls are fading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 124.24.5 and then at 125.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.18.5 and then at Wednesday’s low of 124.14.0. 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 firmer in early trading and hovering near Wednesday’s nearly six-month high. Bulls still have good upside momentum. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 81.645 and then at 81.750. Shorter-term support is seen at the overnight low of 81.465 and then at Tuesday’s low of 81.280. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
September Nymex crude oil prices are lower in early U.S. trading and hit a two-week low overnight. Bears have the slight overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at $100.00 and then at $101.00. Look for sell stops just below technical support at the overnight low of $99.09 and then at $98.50. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were narrowly mixed in overnight trading. Traders will closely examine this morning’s weekly USDA export sales report. Extended weather forecasts out to mid-August are still non-threatening to the corn and soybean crops, and that’s a bearish fundamental—especially for soybeans. U.S. corn and soybean crops are on pace to have record yields this year. Grain market bears continue have the solid overall near-term technical advantage.
