Monday, September 3–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The markets are a bit jittery Tuesday amid continued U.S. saber-rattling against Syria. Russian news agencies reported overnight that two missiles were launched in the Mediterranean Sea. Those reports caused European stock markets to shudder and gold prices to briefly rally. However, it appears the U.S. is still only considering striking Syria with its military power, as President Obama will go to Congress to get its approval for military action.

The U.S. Labor Day holiday saw U.S. markets closed Monday. Now, as U.S. traders come back to work they have a full plate of events that lie just ahead. The important U.S. jobs report is out on Friday. The 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. The U.S. congress returns from its summer recess in mid-September and will immediately have to deal with pressing budget matters. There is an FOMC meeting in September, at which time many believe the U.S. Fed will decided to change its monetary policy.  And, it’s likely that President Obama early this fall will name a new Federal Reserve chairman.

Raw commodity markets saw some good news Monday when upbeat Chinese manufacturing data was released. Chinese officials this week said their country’s annual economic growth target of 7.5% will be met. There was also positive manufacturing data coming out of the European Union on Monday. Both European Union and China economies have seen a string of mostly better-than-expected economic reports recently.

U.S. economic data due for release Tuesday includes the U.S. manufacturing PMI, construction spending, the IDB/TIPP economic optimism index, the ISM manufacturing report on business, and the global manufacturing PMI.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are higher early today on a corrective bounce from recent selling pressure that saw prices last week hit a seven-week low. Prices are 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 the overnight 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 the overnight low of 1,636.00 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: 6.0

Nasdaq index futures: Prices are 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 but just barely 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 the overnight high of 3,113.25 and then at 3,125.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,088.75 and then at 3,075.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher early today on a corrective bounce from recent selling pressure. Prices are still in a four-week-old downtrend on the daily bar chart. Buy stops likely reside just above technical resistance at 14,930 and then at 14,950. Sell stops likely reside just below technical support at 14,850 and then at 14,825. 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: 6.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are solidly lower early today. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 132 16/32 and then at the overnight high of 132 26/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131 31/32 and then at 131 27/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 September U.S. T-Notes: Prices are solidly lower early today. Bears have the strong 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 neutral early today. Shorter-term resistance lies at the overnight high of 125.00.0 and then at 125.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.18.0 and then at 124.10.0 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 higher and hit a fresh four-week high in early U.S. trading. Bulls have near-term technical momentum on their side. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the August high of 82.610 and then at 82.750. Shorter-term support is seen at the overnight low of 82.280 and then at 82.000. Wyckoff’s Intra Day Market Rating: 6.0

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 $108.00 and then at $109.00. Look for sell stops just below technical support at $106.00 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were higher overnight, with soybeans leading gains at sharply higher values. While there was a weekend respite from the hot and dry weather in the U.S. Corn Belt, with cooler temps and scattered rains, the weather forecasts call for the next week to once again be hot and dry in the region. That is fully bullish for soybeans and also bullish corn. The late-summer weather market continues play out in the grain futures markets. Wheat remains overall technically bearish, but is following corn.