* LATEST MARKET DEVELOPMENTS *
The market place is taking President Obama’s re-election in stride early Wednesday, as focus is quickly turning to other matters. Asian and European stock markets were firmer overnight. The U.S. stock indexes are trading slightly lower in the early going Wednesday, on a corrective pullback from solid gains scored Tuesday. Many market watchers do reckon that an Obama victory is an underlying bullish factor for raw commodity markets and U.S. Treasuries, given the easy U.S. monetary policy that has been in place for quite some time, and will likely continue under Obama’s second term. Heading into the end of the year, one major focal point for the market place will be the so-called U.S. fiscal cliff tax and spending issues that the U.S. administration and Congress must address. In other overnight news, German industrial output fell more than expected, while Euro zone retail sales also declined in September. European Union officials also said Wednesday that the Greek economy will contract 6% in 2012 and by 4.2% in 2013, which would be six straight years of economic recession. The EU Commission also put Greece’s unemployment rate at near 24% in 2012 and 2013. European market watchers are also looking to a Greek parliamentary vote on fresh austerity measures which is scheduled for Wednesday. The European Central Bank holds its monthly meeting on Thursday. There is a general leadership conference in China starting Thursday, at which time new leaders in China will be selected. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, consumer credit and the weekly DOE energy stocks report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early today, on a mild corrective pullback from Tuesday’s gains. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the overnight
high of 1,431.40 and then at 1,440.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,411.20 and then at 1,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker early today. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. 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 early today. Shorter-term technical resistance is located at 2,675 and then at last week’s high of 2,694.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,653.75 and then at this week’s low of 2,634.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
Dow futures: Prices are lower early today. Sell stops likely reside just below technical support at Tuesday’s low of 13,085 and then at 13,000. Buy stops likely reside just above technical resistance at 13,150 and then at 13,200. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are solidly higher early today and hit a fresh three-week high. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 149 30/32 and then at 150 9/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 149 16/32 and then at 148 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0
December U.S. T-Notes: Prices are solidly higher early today and hit a fresh three-week high overnight. The bulls maintain the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 133.16.5 and then at 133.27.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.00.0 and then at the overnight low of 132.20.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer in early U.S. trading today and hit a fresh two-month high. Bulls have gained good upside momentum recently. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 81.00 and then at 81.25. Shorter-term support is seen at 80.59 and then at the overnight low of 80.36. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Crude oil prices are lower early today on a corrective pullback from Tuesday’s big gains and due to the stronger U.S. dollar. Bears still have the overall near-term technical advantage as a seven-week-old downtrend is in place on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at $88.00 and then at the overnight high of $88.80. Look for sell stops just below technical support at $87.00 and then at $86.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were mixed in overnight trading. The key outside markets are bearish for the grains early today, as the U.S. dollar index is higher and crude oil prices are lower. Traders are awaiting Friday morning’s USDA monthly supply and demand report on the grains. It is my bias that the grain markets do not have strong downside price potential and are likely to work sideways to higher in to the end of the year.
