* LATEST MARKET DEVELOPMENTS *
There were no major economic or geopolitical developments in overnight trading, leaving markets to languish. Asian shares traded mostly lower Wednesday with European stock markets following suit, partly on disappointment the Chinese Communist party meeting concluded and its communique did not
lay out more specifics on economic reforms.
Amid the current lack fundamental news to drive the markets, attention remains on notions the U.S. Federal Reserve will begin to back off on its easing of monetary policy in the not-too-distant future. Some market watchers expect the Fed to begin “tapering” its monthly bond-buying program (quantitative easing) as early as December. Others are looking for the Fed to make its move in the first quarter of next year. Generally, the past few weeks have seen the market place move up its Fed-tapering expectations by at least several months. This has boosted the U.S. dollar against its rivals, which in turn has been a bearish underlying factor for the raw commodity sector.
The Bank of England said Wednesday it could start to raise its interest rates in the third quarter of 2015, which is nine months sooner than it had forecast in its previous declarations. The European Central Bank at present appears to be the outlier as it recently lowered its key interest rate to a record low 0.25%. Weak economic data from the EU reported Wednesday, in the form of industrial production, continues a spotty overall economic performance from the bloc.
U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the monthly Treasury budget statement.Wednesday’s Wyckoff’s Daily Risk Rating: 5.0 (No major developments overnight and no major economic reports out Wednesday.)
(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). –Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker in early U.S. trading, on more profit taking. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,765.80 and then at last week’s record high of 1,774.20. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,750.00 and then at last week’s low of 1,736.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are lower early today, on more profit taking. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at this week’s high of 3,366.75 and then at 3,387.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,343.75 and then at 3,325.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early today on profit taking. Buy stops likely reside just above technical resistance at 15,710 and then at the record high of 15,745. Sell stops likely reside just below technical support at 15,600 and then at 15,550. 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer early today, on short covering after prices hit a two-month low Tuesday. Bears still have some downside technical momentum. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 131 29/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 13/32 and then at this week’s low of 131 4/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
December U.S. T-Notes: Prices are firmer early today on short covering after hitting a four-week low Tuesday. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 126.08.5 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.27.5 and then at this week’s low of 125.23.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower early today. Bulls still have some upside momentum. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at last week’s high of 81.580 and then at 81.750. Shorter-term support is seen at this week’s low of 81.080 and then at 80.790. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are slightly higher early today, on short covering in a bear market. Prices Tuesday hit a 4.5-month low. Bears have the overall near-term technical advantage. Prices are in an 11-week-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at $94.00 and then at $94.50. Look for sell stops just below technical support at Tuesday’s low of $92.86 and then at $92.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mixed overnight. Corn and soybean bulls have gained upside technical momentum. Wheat is still technically bearish but will be a follower for at least the near term. With the U.S. corn and soybean harvest almost complete, focus of grain market traders turns from U.S. production to overall worldwide demand for U.S. grains, and on the upcoming South American planting and growing season.
