Friday, August 16–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight developments, reports said hundreds of people have died the past few days in anti-government violence in Egypt. The Muslim Brotherhood has called for mass protests as government officials have established a state of emergency in the country. Government troops have reportedly shot citizens protesting in the streets. This news has helped to support the safe-haven gold market and may have helped put some downside pressure on the U.S. stock market Thursday. The market place will continue to closely monitor this situation. Egypt controls the Suez Canal, through which a good percentage of the world’s oil traffic and other commerce flow. In other news Friday, the European Union recorded a monthly consumer price index reading of down 0.5% in July versus June, but up 1.6% year-on-year. This data suggests inflation is still not close to being problematic in the EU, despite years of aggressive monetary policy stimulus. U.S. economic data due for release Friday includes preliminary productivity and costs, new residential construction, and the University of Michigan consumer sentiment survey. The U.S. stock index bulls have faded this week and technically bearish weekly low closes on Friday (today) would be an early clue the stock indexes have put in at least near-term market tops.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today on a corrective bounce after hitting a five-week low Thursday. The bulls are fading. 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 1,670.00 and then at Thursday’s high of 1,681.40. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,653.90 and then at 1,650.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are firmer early today on a corrective bounce after hitting a two-week low on Thursday. The bulls still have the overall near-term technical advantage but have faded a bit. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above 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 Thursday’s high of 3,114.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,068.25 and then at 3,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are firmer early today on a mild corrective bounce after hitting a five-week low Thursday. Bulls have faded. Buy stops likely reside just above technical resistance at Thursday’s high of 15,167 and then at 15,200. Sell stops likely reside just below technical support at Thursday’s low of 15,070 and then at 15,000. 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 to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower early today and seeing bearish follow-through pressure after hitting a contract low on Thursday. Bears have the solid 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 131 30/32 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 11/32 and then at the contract low of 131 1/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0 September U.S. T-Notes: Prices are lower early today and hovering not far above the contract low. Bears have the solid 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 125.15.0 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.03.0 and then at Thursday’s low of 124.26.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading, on a corrective bounce from solid losses Thursday. The bears have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.345 and then at 81.500. Shorter-term support is seen at the overnight low of 81.155 and then at 81.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are firmer early today. Bulls have the solid overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at this week’s high of $107.87 and then at the July high of $108.93. Look for sell stops just below technical support at $107.00 and then at $106.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were weaker in overnight trading, on a corrective pullback from gains seen Thursday. The solid gains in corn Thursday suggest that market has put in a bottom, or is very close to doing such. For soybeans, the strong gains suggest prices can continue to trend sideways to higher in the near term. Wheat will follow corn. Recent export demand for U.S. grains has been good. Dry weather in parts of the U.S. Corn Belt is becoming a more bullish input for soybeans and to a lesser degree corn.
