Monday, July 15–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The highly anticipated China second-quarter gross domestic product report, released Monday, showed an as-expected annual growth rate of 7.5%. China GDP has decreased slightly for the second quarter in a row. China industrial output rose by 8.9% on an annual basis in June, which was slightly below expectations. Asian stock markets posted modest gains on the China data. European stock markets were firmer Monday amid a lack of major fresh European Union economic data released. Traders and investors in Europe paid little attention to last Friday’s Fitch downgrade of France’s credit rating. The world market place is starting to look ahead to Wednesday’s appearance of Federal Reserve Chairman Ben Bernanke before the U.S. House of Representatives, where he will report on monetary policy and the economy. Traders hope the Fed chief will offer fresh clues on when the Fed will start to back off on its monthly bond-buying program (quantitative easing). Many are still thinking the Fed will do such later this year and as soon as September. U.S. economic data due for release Monday includes retail sales, the Empire State manufacturing survey, and manufacturing and trade inventories.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly higher early today and hit a fresh seven-week high overnight. Prices are hovering near 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 bullish early today. Today, shorter-term technical resistance comes in at the all-time high 1,685.50 and then at 1,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last Friday’s low of 1,666.70 and then at 1,657.80. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are slightly higher early today and hit another fresh 12-year high overnight. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at the overnight high of 3,072.75 and then at 3,085.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,062.75 and then at 3,049.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly higher early today and are not far below the all-time high. Buy stops likely reside just above technical resistance at Friday’s high of 15,430 and then at 15,450. Sell stops likely reside just below technical support at Friday’s low of 15,350 and then at 15,300. 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: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady early today. Bears still have the solid overall near-term technical advantage. Prices are in a 10-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are still 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 to bullish early today. Shorter-term resistance lies at the overnight high of 134 8/32 and then at 134 26/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 21/32 and then at 133 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are near steady early today. Bears still 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 126.09.5 and then at 126.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.00.0 and then at 125.27.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The September U.S. dollar index is higher in early U.S. trading, on short covering from recent selling pressure. A bear flag may now be forming on the daily bar chart. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 83.640 and then at 83.750. Shorter-term support is seen at the overnight low of 83.030 and then at Friday’s low of 82.885. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are weaker early today. Bulls still have some upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at $106.00 and then at the overnight high of $106.38. Look for sell stops just below technical support at $105.00 and then at Friday’s low of $104.36. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were weaker in overnight trading. Weather forecasts for the U.S. Corn Belt have moderated a bit from late last week but are still calling for warm and drier conditions for the region, with only slight changes for scattered rainfall. If rainfall and rainfall chances remain only spotty in the coming days, the weather concerns will once again quickly build in the corn and soybean markets. Corn is at or nearing its critical pollination period in much of the Corn Belt. Weather remains the major factor in the grain futures markets at present.
