* LATEST MARKET DEVELOPMENTS *
Asian and European stocks markets were a bit anxious overnight as traders and investors await the results of this week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). The meeting begins on Tuesday morning and ends at midday Wednesday. The fact the Fed will at some point down the road begin to tap the brakes on its very easy money policies is factored into the market place. However, the specific timing of Fed action on monetary policy is the uncertain factor that has traders and investors uncertain and just a bit anxious. A majority of the market place believes the U.S. central bank will at this week’s meeting announce it will begin to scale back, or “taper” its monthly bond-buying program. Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program. The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases. The FOMC will also update its forecasts for U.S. economic conditions in the coming months, which will also be closely examined by the market place. Fed Chairman Ben Bernanke will also hold a press conference Wednesday afternoon. In other news overnight, the German ZEW economic survey came in at a reading of 49.6 in September versus 42.0 in August, which is the highest level in over three years. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the consumer price index, chain store sales, real earnings, Treasury international capital flow data, and the NAHB housing market index.–Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly lower early today on mild profit taking after hitting a six-week high on Monday. Bulls still have the solid overall near-term technical advantage as prices hover not far below the all-time high. 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 to bearish early today. Today, shorter-term technical resistance comes in at the all-time high of 1,705.00 and then at 1,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,683.40 and then at 1,675.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are near steady early today and are seeing mild profit taking after hitting a 12-year high on Monday. The bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is located at 3,175.00 and then at 3,189.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,150.00 and then at 3,130.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.Dow futures: Prices are near steady Tuesday on mild profit taking after hitting a six-week high Monday. Bulls still have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Monday’s high of 15,475 and then at 15,500. Sell stops likely reside just below technical support at Monday’s low of 15,410 and then at 15,350. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-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: 5.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher early today on short covering in a bear market. Bears still 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 above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 131 27/32 and then at 132 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 18/32 and then at Monday’s low of 131 11/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are solidly higher early today. Short covering is featured. Bears still 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 above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 124.16.0 and then at the overnight high of 124.25.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 124.00.0 and then at 123.24.0 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 lower early today. Bulls are weakening, technically. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.505 and then at 81.750. Shorter-term support is seen at Monday’s low of 81.135 and then at 81.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
October Nymex crude oil prices are sharply lower early today. Prices are scoring a bearish “outside day” down on the daily bar chart. Crude oil bulls still have the overall near-term technical advantage but are fading today. In October Nymex crude, look for buy stops to reside just above resistance at $107.00 and then at $107.50. Look for sell stops just below technical support at the overnight low of $105.59 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
Markets were mixed but mostly lower overnight. Soybeans were solidly lower again overnight, wheat was weaker and corn near steady. Rainfall in the U.S. Corn Belt is somewhat helping late-maturing soybean plants, and that’s bearish for futures prices. Focus is on early yield reports on the harvesting of the U.S. corn and soybean crops in the Corn Belt—and on any fresh export demand for U.S. grains.
