Tuesday, October 30–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Once again, the market place is in a subdued mood given the closure of the New York Stock Exchange and other New York markets, due to the major storm that slammed the U.S. east coast. The exchanges are scheduled to reopen on Wednesday, barring any big technical glitches. The major U.S. data point of the week is Friday’s employment report. At this time, the Labor Department says it is working to get the report released on schedule. European stocks and the Euro currency rose Tuesday in quieter dealings, due to the closure of U.S. stock markets early this week. European traders are awaiting the next European Union steps in the ongoing efforts to contain the EU sovereign debt crisis.Stocks in Asia rose Tuesday. Focus in Asia was on a Bank of Japan policy meeting. The BOJ announced a fresh 11 trillion yen ($138 billion) asset purchase plan. The move was widely expected. Well-known, bow-tie-wearing commodity trader Jimmy Rogers reportedly said Tuesday that world currencies being debased will allow raw commodity markets, including the precious metals, to extend their long-term price uptrends for the next eight to 10 years. He said he sees raw commodity shortages for up to the next 30 years. I cannot disagree with Rogers’ assumptions. Economic theory says increasing supplies of a currency leads to price inflation. Combine that with increasing worldwide demand for raw commodities and it’s a bullish recipe for raw commodity markets. U.S. economic data due for release Tuesday includes the Goldman Sachs and Johnson Redbook weekly retail sales reports, and the S&P/Case-Shiller home price index.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today and hit a fresh 11-week low overnight. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at 1,416.70 and then at 1,425.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,393.20 and then at 1,380.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today. The shorter-term moving averages (4- 9-and 18-day) are 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 Monday’s high of 2,659.00 and then at 2,673.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,626.00 and then at last week’s low of 2,604.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Dow futures: Prices are weaker early today. Sell stops likely reside just below technical support at 13,000 and then at 12,950. Buy stops likely reside just above technical resistance at 13,054 and then at 13,100. 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 slightly lower early today. Bulls have regained a bit of upside momentum just recently, on safe-haven buying. 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 to bullish early today. Shorter-term resistance lies at the overnight high of 149 4/32 and then at 149 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 148 13/32 and then at Monday’s low of 148 2/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

December U.S. T-Notes: Prices are near steady 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 133.01.5 and then at 133.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.22.5 and then at Monday’s low of 132.17.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The December U.S. dollar index is lower in early U.S. trading today. While bears still have the overall near-term technical advantage, the bulls have gained some upside momentum recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at Monday’s high of 80.42 and then at 80.59. Shorter-term support is seen at 79.77 and then at 79.50. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are firmer early today and are hovering near a four-month low scored on Monday. Bears 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 Monday’s high of $86.43 and then at $87.00. Look for sell stops just below technical support at last week’s low of $84.94 and then at $84.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were firmer in overnight trading. The key outside markets are in a bullish posture for the grains early today, as the U.S. dollar index is lower and crude oil prices are firmer. Trading in the grains is subdued early this week, due to the closure of the New York markets. Focus of grain traders is on the worldwide grain demand prospects, amid higher price levels.