OVERNIGHT/EARLY MORNING DEVELOPMENTS
There was no feature in overnight quiet trading. Gold and crude oil are firmer in early electronic dealings. The dollar is slightly higher versus the other major currencies. T-Bonds and T-Notes are slightly higher and the U.S. stock indexes are slightly higher in early electronic trading. Grains were narrowly mixed in overnight electronic trading. There was no fresh, major, market-moving fundamental news overnight.
U.S. ECONOMIC REPORTS/EVENTS
On tap today is the MBA refinancing index, weekly DOE energy stocks data, and the Fed’s FOMC meeting begins today and ends Thursday. Traders are keenly awaiting Thursday afternoon’s conclusion of the FOMC meeting, when it’s expected that U.S. interest rates will be hiked again. But there is uncertainty about the meeting’s outcome–whether the Fed will hike by 25 basis points or by 50 basis points.
U.S. STOCK INDEXES
The indexes are slightly higher in early morning electronic trading. Bears gained some near-term technical momentum on Tuesday. However, my bias is still that trading will be choppy in the near term, amid summertime doldrums in the stock market.
September S&P 500: We saw a shorter-term “collapse in volatility” recently, which did suggest a bigger price move was on the horizon–and we got that bigger move Tuesday–to the downside. Prices also saw a bearish downside “breakout” from a wedge pattern on the daily bar chart, and price action also scored a bearish “outside day” down Tuesday. This is shorter-term bearish. The shorter-term moving averages (4-, 9- and 18-day) are turning bearish. The 4-day moving average is below the 9-day. The 9-day is still below the 18-day moving average. Short-term oscillators are neutral again today. Today, key shorter-term technical support comes in at 1,248.10–Tuesday’s low. Sell stops likely reside just under that level. More sell stops likely reside under shorter-term support at 1,242.00. Shorter-term upside resistance for active traders today is at 1,260.00. Light buy stops are likely located just above that price level, and more buy stops are likely located just above shorter-term resistance at Tuesday’s high of 1,263.20.
PIVOT POINT LEVELS FOR S&P 500:
Pivot:———— 1,253.65
1st Support:—— 1,244.10
2nd Support:—— 1,238.60
1st Resistance:— 1,259.25
2nd Resistance:— 1,268.80
September Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are turning more bearish. The 4-day is moving below the 9-day moving average. The 9-day moving average is still below the 18-day. Short-term oscillators are bearish today. Today, shorter-term technical support is located at Tuesday’s low of 1,541.50. Sell stops likely reside just below that level, and then heavier sell stops likely reside below solid support at the June low of 1,528.75. On the upside, short-term resistance is seen at 1,565.00. Buy stops are likely located just above that level. More buy stops are likely located just above resistance at Tuesday’s high of 1,576.50.
PIVOT POINT LEVELS FOR NASDAQ:
Pivot:———— 1,545.00
1st Support:—— 1,541.75
2nd Support:—— 1,538.50
1st Resistance:— 1,548.25
2nd Resistance:— 1,551.50
September Dow: Prices Tuesday scored a bearish “outside day” down on the daily bar chart, and that’s bearish for today. For today, sell stops likely reside just below support at Tuesday’s low of 10,990 and then just below support at 10,900. Buy stops likely reside just above shorter-term technical resistance at Tuesday’s high of 11,140 and then heavier stops just above resistance at last week’s high of 11,210. Shorter-term moving averages are turning bearish, as the 4-day moving average is moving below the 9-day. The 9-day is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish today.
PIVOT POINT LEVELS FOR DOW:
Pivot:———— 11,046
1st Support:—— 10,952
2nd Support:—— 10,896
1st Resistance:— 11,102
2nd Resistance:— 11,196
U.S. TREASURY BONDS AND NOTES
Both notes and bond prices were firmer again in overnight trading in Chicago. More short covering was featured after recent losses. Bears still have the near-term technical momentum on their side.
September U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are still fully bearish. The 4-day moving average is below the 9-day average and the 18-day. The 9-day is below the 18-day. Oscillators are turning bullish today.
Shorter-term resistance lies at Tuesday’s high of 106 even and then at 106 7/32. Buy stops likely lie just above those levels. Shorter-term technical support lies at of 105 24/32 and then at this week’s low of 105 14/32. Sell stops likely reside just below those levels, with heavier stops likely just below this week’s low.
PIVOT POINT LEVELS FOR T-BONDS:
Pivot:———– 105 26/32
1st Support:—– 105 21/32
2nd Support:—– 105 12/32
1st Resistance:– 106 3/32
2nd Resistance:– 106 17/32
September U.S. T-Notes: Prices are firmer in early morning dealings. Oscillators are turning bullish today. Buy stops likely reside just above shorter-term resistance at Tuesday’s high of 104.13.0, and then just above resistance at 104.21.5. Shorter-term moving averages are still fully bearish. The 4-day moving average is below the 9-day and 18-day average. The 9-day is below the 18-day moving average. Heavier sell stop orders are likely located just below solid support at Monday’s contract low of 104.01.5, and then just below support at 103.24.0.
PIVOT POINT LEVELS FOR T-NOTES:
Pivot:———— 104.09.0
1st Support:—— 104.04.0
2nd Support:—— 103.31.0
1st Resistance:— 104.14.0
2nd Resistance:— 104.19.0
