Monday, June 10–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

China reported weaker-than-expected economic data during the weekend. Its producer price index fell 2.9% in May, on an annual basis. Imports declined 0.3% in May. China industrial production was up 9.2% year-on-year in May–down slightly from April. Electricity output grew by 4.1% on an annual basis in May, versus a 6.2% rise in April. The China data continues a recent string of weaker-than-anticipated reports coming out of the world’s second-largest economy. The data is a bearish underlying factor for the raw commodity sector to start the trading week. In Tokyo, the Nikkei stock index recovered some of its recent heavy losses on Monday by gaining nearly 5% on the day. Some better economic data out of Japan helped to lift its stock market. European stock markets were narrowly mixed Monday. In the U.S. there is a very light economic report slate on tap Monday, but St. Louis Federal Reserve President James Bullard is speaking in the morning. Bullard is a voting member of the FOMC. U.S. economic data due for release Monday includes the employment trends index.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today. Bulls have the overall near-term technical advantage but have faded recently. 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 bullish early today. Today, shorter-term technical resistance comes in at 1,650.00 and then at 1,657.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,635.80 and then at 1,625.00. 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. Bulls have the overall near-term technical advantage but have faded recently. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at 3,000.00 and then at last week’s high of 3,007.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,976.25 and then at 2,961.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today. Bulls still have the overall near-term technical advantage, but have faded recently. Buy stops likely reside just above technical resistance at 15,297 and then at 15,350. Sell stops likely reside just below technical support at 15,208 and then at 15,150. 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: 5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are weaker early today and hovering near the recent contract low. Bears have the solid overall near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 139 27/32 and then at 140 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 139 8/32 and then at the contract low of 138 30/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 September U.S. T-Notes: Prices are weaker early today. Bears have the solid 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 129.05.0 and then at 129.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 128.27.5 and then at 128.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early U.S. trading, on short covering. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.270 and then at 82.500. Shorter-term support is seen at the overnight low of 81.930 and then at 81.510. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bulls and bears are still on a level near-term technical playing field amid choppy trading recently. In July Nymex crude, look for buy stops to reside just above resistance at $96.00 and then at last week’s high of $96.39. Look for sell stops just below technical support at $95.00 and then at $94.50. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were lower in overnight trading. The key “outside markets” are in a bearish posture to start the new trading week, as the U.S. dollar index is firmer and crude oil prices are weaker. The weaker China economic data released over the weekend is also a mild negative for the grains. Soybean bulls still have some near-term technical momentum. Corn trading remains choppy. Wheat bears remain in technical control. There was not as much rain as expected in the U.S. Corn Belt during the weekend, and this week’s forecast for the region is for drier and warmer conditions, which is a mildly bearish factor for corn and soybeans to start the week. Traders will closely examine Monday morning’s weekly USDA export inspections report.