Wednesday, November 21–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, the Tuesday meeting of Euro zone officials in Brussels, on when to disburse the next tranche of bailout money to Greece, failed to reach agreement. The group will meet next week, reports said. It was widely expected there would be an agreement reached Tuesday and Greece would get the bailout money. No agreement just added a bit more uncertainty to the market place. However, the EU doesn’t have much choice if the bloc wants the financially troubled EU country to stay afloat and stay in the union. The Euro currency was pressured Wednesday on the lack of agreement among EU leaders on the disbursement of funds to Greece. Traders and investors continue to keep one eye on the simmering situation between Israel and Hamas. There were reports Tuesday of a ceasefire being imminent. However, the armed conflict continues. Reports said a bus exploded in Tel Aviv Wednesday. Any further escalation in that situation could drive oil prices higher and see fresh flight-to-safety buying of gold, U.S. Treasuries and the U.S. dollar. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly jobless claims report, the flash manufacturing PMI, the University of Michigan consumer sentiment survey, leading economic indicators, and the weekly DOE energy stocks report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early yesterday, in light pre-holiday trading. The shorter-term moving averages (4-, 9- and 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Yesterday, shorter-term technical resistance comes in at the overnight high of 1,389.20 and then at 1,400.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at the overnight low of 1,377.10 and then at 1,363.70. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are near steady early yesterday in quiet trading. The shorter-term moving averages (4- 9-and 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Shorter-term technical resistance is located at 2,600.00 and then at 2,625.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,577.00 and then at 2,556.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
Dow futures: Prices are near steady early yesterday. Sell stops likely reside just below technical support at 12,700 and then at Tuesday’s low of 12,670. Buy stops likely reside just above technical resistance at Tuesday’s high of 12,775 and then at 12,800. Shorter-term moving averages are bearish early yesterday, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bullish early yesterday. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker early yesterday and are seeing more profit taking. Bulls are fading. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at the overnight high of 150 25/32 and then at 151 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 150 7/32 and then at 150 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker early yesterday on more profit taking. Bulls are fading a bit. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at the overnight high of 133.23.0 and then at 134.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.15.0 and then at 133.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly higher in early U.S. trading yesterday. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at the overnight high of 81.30 and then at last week’s high of 81.51. Shorter-term support is seen at the overnight low of 80.95 and then at this week’s low of 80.83. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are firmer early yesterday on a corrective bounce from solid losses scored on Tuesday. The Middle East tensions will continue to limit selling pressure in crude. In January Nymex crude, look for buy stops to reside just above resistance at $88.00 and then at $89.00. Look for sell stops just below technical support at $87.00 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were firmer in overnight trading. Expect quieter trading conditions the rest of the week due to the U.S. Thanksgiving holiday on Thursday. Grain market bulls are working to recover from recent selling pressure, but have more work to do in the near term, to suggest any price uptrends can be sustained. It is my bias that there is not strong downside price pressure left in corn and soybeans.
