* Latest Market Developments *
NOTE: I am out of the office all week this week. My friend and fellow market analyst Ken Seehusen will be producing my report today. Ken’s format and style is a bit different than mine, but I think you’ll enjoy and benefit from his work, too.
—Jim Wyckoff
The STOCK INDEXES
The December NASDAQ 100 was higher overnight as it extends the rally off Tuesday’s low amid continued optimism by investors that interest rates will remain low into the foreseeable future. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends this week’s rally, monthly resistance crossing at 4258.97 is the next upside target. Closes below Tuesday’s low crossing at 4004.25 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 4118.75. Second resistance is monthly resistance crossing at 4258.97. First support is Tuesday’s low crossing at 4004.25. Second support is broken resistance marked by July’s high crossing at 3983.25.
The December S&P 500 was higher overnight as it extends this year’s rally into uncharted territory. Stochastics and the RSI are becoming overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends this year’s rally to new highs, upside targets will be hard to project. Closes below Monday’s low crossing at 1969.00 would confirm that a top has been posted while opening the door for additional weakness near-term. First resistance is the overnight high crossing at 2014.30. Second resistance is unknown. First support is Monday’s low crossing at 1969.00. Second support is the reaction low crossing at 1930.20.
INTEREST RATES
December T-bonds were slightly higher due to short covering overnight. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends the decline off August’s high, the 62% retracement level of the March-August-rally crossing at 134-17 is the next downside target. Closes above the 20-day moving average crossing at 137-27 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 136-18. Second resistance is the 20-day moving average crossing at 137-27. First support is the 50% retracement level of the March-August-rally crossing at 135-21. Second support is the 62% retracement level of the March-August-rally crossing at 134-17.
ENERGY
October Nymex crude oil was slightly lower overnight. Stochastics and the RSI have turned neutral to bearish signaling that sideways to lower prices are possible near-term. If October resumes the decline off June’s high, the 50% retracement level of the 2009-2011-rally crossing at 85.64 is the next downside target. Closes above the reaction high crossing at 96.00 are needed to confirm that a short-term trend change has taken place. First resistance is the reaction high crossing at 96.00. Second resistance is the reaction high crossing at 97.75. First support is the 38% retracement level of the 2009-2011-rally crossing at 90.62. Second support is the 50% retracement level of the 2009-2011-rally crossing at 85.64.
CURRENCIES
The December Dollar was higher overnight. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December renews this year’s rally, weekly resistance crossing at 84.96 is the next upside target. Closes below the 20-day moving average crossing at 83.71 would confirm that a short-term top has been posted. First resistance is Thursday’s high crossing at 84.90. Second resistance is weekly resistance crossing at 84.96. First support is Tuesday’s low crossing at 84.00. Second support is the 20-day moving average crossing at 83.71.
PRECIOUS METALS
December gold was lower overnight as it extends the decline off July’s high. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends the decline off July’s high, the 87% retracement level of the 2013-2014-rally crossing at 1211.70 is the next downside target. Closes above the 20-day moving average crossing at 1257.50 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 1237.60. Second resistance is the 20-day moving average crossing at 1257.50. First support is Thursday’s low crossing at 1216.30. Second support is the 87% retracement level of the 2013-2014-rally crossing at 1211.70.
GRAINS
December corn was lower overnight as it extend this summer’s decline due to bearish weather forecast and the impending corn harvest in the Midwest. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends the decline off May’s high, monthly support crossing at 3.24 1/2 is the next downside target. Closes above the 20-day moving average crossing at 3.52 are needed to confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 3.52. Second resistance is the reaction high crossing at 3.70. First support is last Thursday’s low crossing at 3.35 3/4. Second support is monthly support crossing at 3.24 1/2.
December wheat was lower overnight as it extends this year’s decline. The low-range close sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends the aforementioned decline, monthly support crossing at 4.75 1/2 is the next downside target. Closes above the 20-day moving average crossing at 5.29 1/4 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 5.06. Second resistance is the 20-day moving average crossing at 5.29 1/4. First support is the overnight low crossing at 4.83 3/4. Second support is monthly support crossing at 4.75 1/2.
November soybeans was lower overnight as it extends this summer’s decline. The low-range close sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are oversold but remain neutral to lower signaling that sideways to lower prices are possible near-term. If November extends this summer’s decline, monthly support crossing at 9.30 1/2 is the next downside target. Closes above the 20-day moving average crossing at 10.05 1/4 are needed to confirm that a low has been posted. First resistance is the 20-day moving average crossing at 10.05 1/4. Second resistance is the reaction high crossing at 10.38. First support is the overnight low crossing at 9.64. Second support is monthly support crossing at 9.30 1/2.
