Wednesday, September 4–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place is still anxious regarding the U.S. threat to attack Syria after the Assad regime allegedly used chemical weapons against Syrian citizens. The U.S. Congress appears to be backing President Obama on his notion to use U.S. firepower to strike Syria. Still, it appears unlikely that a U.S. strike will occur this week, as congressional debate and voting on the matter will not be completed likely until sometime next week. European and Asian stocks were weaker due in part to the worries regarding the Syrian situation. However, losses in European stocks were limited by some more upbeat economic data coming out of the European Union. The data company Markit reported EU business activity is on the upswing, as its PMI rose to 51.5 in August from 50.5 in July. Interest rates continue to rise in the major economies of the world. German five-year notes fetched a 21-month high yield of 1.00% Wednesday. U.S. bond yields are also at two-plus year highs. Such suggests growing world economies, which in turn is a bullish factor for the raw commodity sector, from a demand perspective. Major world economic data is just around the corner. The important U.S. jobs report is out on Friday. The Bank Japan, Bank of England and European Central Bank hold their monthly monetary policy meetings on Thursday. There is a Group of 20 nations meeting this week. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs and Johnson Redbook retail sales surveys, the trade deficit report, the Fed’s beige book, the ISM New York business report, the IDB/TIPP economic optimism index, and domestic auto sales.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today. Prices are still in a four-week-old downtrend on the daily bar chart. 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 1,648.80 and then at 1,655.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 1,631.00 and then at the August low of 1,625.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are slightly higher early today. The bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-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 3,100.00 and then at Tuesday’s high of 3,113.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,083.25 and then at 3,075.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly lower early today. Prices are still in a four-week-old downtrend on the daily bar chart. Buy stops likely reside just above technical resistance at 14,870 and then at Tuesday’s high of 14,915. Sell stops likely reside just below technical support at 14,800 and then at Tuesday’s low of 14,765. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below 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 lower early today and hovering not far above the recent contract low. Bears have the solid 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 even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 132 even and then at 132 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 8/32 and then at 131 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are weaker early today. Bears have the strong overall near-term technical advantage. 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 bearish early today. Shorter-term resistance lies at the overnight high of 124.19.0 and then at 124.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.12.0 and then at 124.08.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is weaker on mild profit taking after hitting a six-week high on Tuesday. Bulls still have some near-term technical momentum on their side. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.710 and then at Tuesday’s high of 82.970. Shorter-term support is seen at 82.315 and then at 82.185. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
October Nymex crude oil prices are weaker early today on more corrective downside pressure after hitting a more than two-year high last week. Crude bulls still have the overall near-term technical advantage. However, the bulls may have become exhausted with last week’s big push higher in prices. In October Nymex crude, look for buy stops to reside just above resistance at Tuesday’s high of $108.83 and then at $109.00. Look for sell stops just below technical support at $107.50 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were lower overnight, with soybeans leading losses. The weather forecasts for the U.S. Corn Belt call for the next week to be very warm and dry in the region. That is somewhat bullish for soybeans. But as the late-summer weather market plays out in the grain futures markets, it’s now the case of the damage to the crops already being mostly factored into present prices. A bull market must be fed “fresh” fundamental inputs often, and the dry and warm weather in the Corn Belt is not fresh any more. For grain market prices to gain more upside in the near term, some new fundamental news will have to occur. Maybe that will come from the demand side, or from actual yield results once the corn and soybean harvests begin in earnest.
