*Latest Market Developments*
News reports as of this writing said a large convoy of Russian aid trucks has just crossed the border into Ukraine Friday. The reports said Ukraine officials are calling the convoy an invasion. This has spooked the market place a bit as U.S. trading gets under way. Gold, U.S. Treasuries and the U.S. dollar have rallied early Friday, while the U.S. stock indexes are under mild pressure. Last week, some reports said a Russian convoy had crossed the border into Ukraine, and the Ukraine military engaged the convoy and destroyed part of it. However, the Russian military denied any encounter ever occurred.
Focus Friday is on the annual Kansas City Federal Reserve meeting in Jackson Hole, Wyoming, that began Thursday. This is arguably the economic highlight of the week, if not the month. The confab of world central bankers has in the past yielded important U.S. monetary policy speeches and clues to the direction of monetary policy. Fed Chair Janet Yellen and ECB President Mario Draghi are scheduled to speak on Friday in Jackson Hole. Many expect Yellen’s speech to favor the dovish camp on U.S. monetary policy. Draghi’s speech will also be extra important, given the recent troubling economic signals coming out of the European Union.
There is no other U.S. economic data due for release Friday.
Wyckoff’s Daily Risk Rating: 7.0 (The market place is partially focused on the Russia-Ukraine crisis Friday morning.
(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.
–JimWyckoff
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are slightly lower in early trading, on a mild corrective pullback after hitting a record high Thursday. 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in Thursday’s record high of 1,992.00 and then at 2,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 1,980.75 and then at 1,973.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are slightly higher in early trading today and hit another 14-year high overnight. Bulls are in solid technical command. 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 seen at the overnight high of 4,051.50 and then at 4,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 4,037.00 and then at 4,025.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
Dow futures: Prices are slightly lower in early U.S. trading, on mild profit taking. Bulls still have upside near-term technical momentum. Buy stops likely reside just above technical resistance at Thursday’s high of 17,049 and then at the record high of 17,080. Sell stops likely reside just below technical support at Thursday’s low of 16,975 and then at 16,950. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are higher early today, on some more safe-haven demand. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 bullish early today. Shorter-term resistance lies at the overnight high of 139 4/32 and then at 139 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 138 20/32 and then at this week’s low of 137 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 December U.S. T-Notes: Prices are higher in early trading. Bulls 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 below 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 125.18.5 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.09.5 and then at this week’s low of 125.04.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early trading and hovering not far below Thursday’s 11-month high. Bulls still have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 82.420 and then at 82.50.0. Shorter-term support is seen at the overnight low of 82.125 and then at 82.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are weaker in early U.S. trading. Prices Thursday hit a 6.5-month low. Bears have the firm overall near-term technical advantage as prices are in a steep two-month-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at $94.00 and then at Thursday’s high of $94.45. Look for sell stops just below technical support at $93.00 and then at this week’s low of $92.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were mostly firmer in overnight trading, on short covering. Not much new this week. Bears are in full technical command of the grains and fundamentals are also bearish. It’s still my bias that the seasonal harvest lows in corn and soybean markets will come early this year, and wheat will be a follower.
