Friday, October 31–Jim Wyckoff’s Morning Web Log
(NOTE: Today my friend and fellow trader/analyst Ken Seehusen is
doing my morning report. Ken is a farmer and I produce his reports
for several days when he is planting and harvesting. Ken covers for
me a few days each year. Ken’s report is a bit different than mine,
but I think you’ll find it also to be informative.–Jim)
The STOCK INDEXES & MARKETS
The December NASDAQ 100 was lower overnight due to profit taking as it
consolidates some of Thursday’s rally but remains above the 20-day moving
average crossing at 1303.53. Stochastics and the RSI remain bullish
signaling that sideways to higher prices are possible near-term. Closes
above the October 14th reaction high crossing at 1499.00 are needed to
confirm that a bottom has been posted. If December renews this fall’s
decline, the 87% retracement level of the 2002-2007-rally crossing at 979.90
is the next downside target. The December NASDAQ 100 was down 34.00 pts. at
1311.00 as of 5:51 AM CST. First resistance is Thursday’s high crossing at
1354.75. Second resistance is the reaction high crossing at 1364.25. First
support is the 20-day moving average crossing at 1303.53. Second support is
the 10-day moving average crossing at 1276.65. Overnight action sets the
stage for a lower opening by December NASDAQ 100 when the day session begins
later this morning.
The December S&P 500 index was lower overnight due to light profit taking as
it consolidates some of Thursday’s rally. Multiple closes above this
resistance level would signal that a larger-degree short covering rally
might be unfolding into early-November. Stochastics and the RSI are bullish
signaling that sideways to higher prices are possible near-term. However, it
will take closes above the October 14th reaction high crossing at 1066.50 to
confirm that a bottom has been posted. If December renews this fall’s
decline, the March 2003 low crossing at 787.50 is the next downside target.
First resistance is Wednesday’s high crossing at 970.50. Second resistance
is the reaction high crossing at 992.20. First support is the 10-day moving
average crossing at 924.12. Second support is Monday’s low crossing at
825.00. The December S&P 500 Index was down 15.90 pts. at 945.60 as of 5:53
AM CST. Overnight action sets the stage for a lower opening by the December
S&P 500 index when the day session begins later this morning.
December T-bonds were higher overnight due to short covering as it
consolidates some of Thursday’s decline. However, stochastics and the RSI
have turned bearish signaling that sideways to lower prices are possible
near-term. If December extends this week’s decline, October’s low crossing
at 112-17 is the next downside target. Closes above the 20-day moving
average crossing at 116-04 would confirm that a short-term low has been
posted. First resistance is the 10-day moving average crossing at 115-22.
Second resistance is the 20-day moving average crossing at 116-04. First
support is Thursday’s low crossing at 113-19. Second support is October’s
low crossing at 112-17.
ENERGY MARKETS
December crude oil was lower overnight as it extends this fall’s decline
below the 62% retracement level of the 2007-2008-rally crossing at 68.84.
Stochastics and the RSI are oversold and are turning bullish hinting that a
short-term low might be in or is near. Closes above the 20-day moving
average crossing at 73.71 are needed to confirm that a short-term low has
been posted. If December renews this fall’s decline, the 75% retracement
level of the aforementioned rally crossing at 51.81 is the next downside
target. First resistance is Thursday’s high crossing at 70.60. Second
resistance is the 20-day moving average crossing at 73.71. First support is
Monday’s low crossing at 61.30. Second support is the 75% retracement level
crossing at 51.81.
CURRENCIES
The December Dollar was higher overnight due to short covering as it
rebounds off initial support marked by the 10-day moving average crossing at
85.42. However, stochastics and the RSI have turned bearish signaling that
sideways to lower prices are possible near-term. Closes below the 20-day
moving average crossing at 83.63 are needed to confirm that a short-term top
has been posted. If December renews the rally off September’s low, weekly
resistance crossing at 90.27 is the next upside target. First resistance is
the overnight high crossing at 86.58. Second resistance is Tuesday’s high
crossing at 88.49. First support is the 20-day moving average crossing at
83.63. Second support is the reaction low crossing at 82.00.
The December Euro was lower overnight due to profit taking as it
consolidates some of this week’s rally and trading below the 10-day moving
average crossing at 128.33. However, stochastics and the RSI are bullish
signaling that sideways to higher prices are possible near-term. Closes
above the 20-day moving average crossing at 131.938 are needed to confirm
that a short-term low has been posted. If December renews this fall’s
decline, monthly support marked by the 50% retracement level of the
2001-2008-rally crossing at 121.770 is the next downside target. First
resistance is the 20-day moving average crossing at 131.938. Second
resistance is the reaction high crossing at 137.750. First support is the
overnight low crossing at 126.530. Second support is Tuesday’s low crossing
at 123.260.
PRECIOUS METALS
December gold was lower overnight due to profit taking as it consolidates
some of this week’s rally Stochastics and the RSI are bullish signaling that
sideways to higher prices are possible near-term. Closes above the 20-day
moving average crossing at 797.80 are needed to confirm that a short-term
low has been posted. If December renews this month’s decline, the 62%
retracement level crossing at 651.10 is the next downside target. First
resistance is Thursday’s high crossing at 778.30. Second resistance is the
38% retracement level of the 2004-2008-rally crossing at 802.70. First
support is last Friday’s low crossing at 681.00. Second support is the 62%
retracement level of the aforementioned rally crossing at 651.10.
GRAINS
December corn was lower due to light profit taking overnight as it
consolidates some of this week’s rally. A stronger the U.S. Dollar provided
light downside pressure to the market, which added to the bearish tone
following Thursday’s disappointing export sales report. The report showed
that world demand has slowed in the face of an unfolding global economic
recession. Technically, Monday’s low has the potential to mark a double
bottom on the daily chart and is in the timeframe when a seasonal low is due
to be posted. Stochastics and the RSI are bullish signaling that sideways to
higher prices are possible near-term. Closes above the reaction high
crossing at 4.42 1/2 are needed to confirm that a seasonal low has been
posted. If December renews the decline off June’s high, the 87% retracement
level of the 2007-2008-rally crossing at 3.27 1/4 is the next downside
target. First resistance is Thursday’s high crossing at 4.33. Second
resistance is the reaction high crossing at 4.42 1/2. First support is the
10-day moving average crossing at 3.98 3/4. Second support is Monday’s low
crossing at 3.64.
December wheat was lower overnight due to light profit taking as it
consolidates some of Wednesday’s rally. Stochastics and the RSI remain
bullish signaling that a short-term low might be in or is near. The
low-range close overnight sets the stage for a steady to lower opening when
the day session opens later this morning. Multiple closes above the 20-day
moving average crossing at 5.57 3/4 are needed to confirm that a short-term
low has been posted. If December extends the decline off August’s high, the
May 2007 low crossing at 4.90 is the next downside target.
November soybeans were lower overnight due to profit taking as it
consolidates some of this week’s rally but remains above the 20-day moving
average crossing at 9.07 1/2. Stochastics are bullish signaling that
sideways to higher prices are possible near-term. Multiple closes above the
reaction high crossing at 9.90 are needed confirm that a short-term low has
been posted. If November renews this fall’s decline, the 87% retracement of
the 2006-2008-rally crossing at 7.24 3/4 is the next downside target. First
resistance is Thursday’s high crossing at 9.64. Second resistance is the
reaction high crossing at 9.90. First support is the 20-day moving average
crossing at 9.07 1/2. Second support is the 10-day moving average crossing
at 9.00 3/4.
