Tuesday, March 12–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, Spanish and Italian bond yields held steady following successful government debt auctions in both countries Tuesday. However, the Italian bond auction did see the government’s borrowing costs rise to a three-month high, reports said. The auctions came after the Fitch ratings agency last Friday downgraded Italy’s credit rating. Another Italian bond auction is slated for Wednesday. The U.S. dollar hit a 3.5-year high against the Japanese yen overnight amid reports the Bank of Japan will continue on its aggressive monetary policy easing path. Asian stock markets were pressured again Tuesday following the recent spate of Chinese economic data that hints at slowing growth and rising inflationary pressures. U.S. economic data due for release Tuesday includes the Manpower quarterly U.S. employment survey, the NFIB small business optimism index, and the weekly Goldman Sachs and Johnson Redbook retail sales reports.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early yesterday but hovering near a five-year high. The bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early yesterday. 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 bearish early yesterday. Yesterday, shorter-term technical resistance comes in at Monday’s high of 1,551.40 and then at 1,565.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at Monday’s low of 1,540.60 and then at 1,524.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker in early trading but hovering near a five-month high. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are bullish early yesterday. 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 neutral to bearish early yesterday. Shorter-term technical resistance is located at the overnight high of 2,808.00 and then at last week’s high of 2,817.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 2,787.50 and then at 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early yesterday and hovering near Monday’s all-time record high. The bulls have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at Monday’s low of 14,310 and then at 14,265. Buy stops likely reside just above technical resistance at Monday’s record high of 14,376 and then at 14,400. Shorter-term moving averages are bullish early yesterday, 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 yesterday. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer early yesterday on short covering in a bear market. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Shorter-term resistance lies at 141 16/32 and then at 142 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 141 even and then at the overnight low of 140 18/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 June U.S. T-Notes: Prices are firmer early yesterday on short covering. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early yesterday. Shorter-term resistance lies at the overnight high of 130.15.0 and then at 130.23.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 130.08.0 and then at last week’s low of 130.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The U.S. dollar index is firmer early yesterday. The greenback bulls have the overall near-term technical advantage as prices hover not far below a seven-month high scored last week. Slow stochastics for the dollar index are neutral early yesterday. The dollar index finds shorter-term technical resistance at the overnight high of 83.060 and then at last week’s high of 83.160. Shorter-term support is seen at Monday’s low of 82.790 and then at 82.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are near steady early yesterday. Bears still have the overall near-term technical advantage. In April Nymex crude, look for buy stops to reside just above resistance at $92.50 and then at $93.00. Look for sell stops just below technical support at the overnight low of $91.60 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mostly weaker overnight. The soybean and corn market bulls are gaining upside technical momentum. But the wheat market bulls remain very weak, which is also keeping a lid on price strength in corn and soybeans. Wheat will have to show some significant price strength in the near term in order for corn and soybeans to gain much more upside power.
