China Manufacturing Data Provides Lift to Commodity Markets

* LATEST MARKET DEVELOPMENTS *

In overnight news, the much-anticipated Chinese manufacturing data came out better than expected. The purchasing managers index rose to 50.2 in October from 49.0 in September. This is leading to ideas that China’s economy has bottomed out and is on the mend. Now, the market place awaits the U.S. employment report that is due out Friday morning. The key non-farm payrolls component of the report is forecast to come in at up 125,000 in October. In Europe, reports overnight showed Greece’s manufacturing sector contracted at its fastest pace in four months in October. The Greek purchasing managers index was 41.0 in October versus 42.2 in September. The U.S. economic data slate due for release Thursday is very heavy and includes the weekly DOE energy stocks report, ICSC chain store sales, domestic auto sales, the Challenger job cuts report, the ADP national employment report, weekly jobless claims, preliminary productivity and costs, the U.S. manufacturing PMI, the ISM manufacturing report, the consumer confidence index, and construction spending.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower early today. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 1,418.20 and then at 1,433.10. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,399.00 and then at this week’s low of 1,393.20. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are slightly higher early today. The shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below 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 2,650.00 and then at Wednesday’s high of 2,676.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,627.25 and then at this week’s low of 2,604.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are near steady early today. Sell stops likely reside just below technical support at 13,000 and then at this week’s low of 12,980. Buy stops likely reside just above technical resistance at 13,100 and then at Wednesday’s high of 13,120. Shorter-term moving averages are bearish early today, 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 neutral early today. Wyckoff’s Intra-Day
Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today as trading has been choppy. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 149 11/32 and then at 149 26/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 148 23/32 and then at 148 11/32. 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 today. 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 early today. Shorter-term resistance lies at the overnight high of 132.31.0 and then at this week’s high of 133.02.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.25.0 and then at
132.18.5. 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 today, on tepid short covering in a bear market. Bears have regained some downside momentum this week. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.19 and then at this week’s high of 80.42. Shorter-term support is seen at this week’s low of 79.72 and then at 79.50. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are near steady early today and are still hovering not far above the four-month low scored on Monday. Bears still have the overall near-term technical advantage as a downtrend on the daily bar chart has been re-established. In December Nymex crude, look for buy stops to reside just above resistance at this week’s high of $87.19 and then at $88.00. Look for sell stops just below technical support at the overnight low of $85.92 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were higher in overnight trading on some more short covering and bargain hunting, and following an upbeat China manufacturing sector report. The grain market bulls have gained some more upside near-term technical momentum this week.