Wednesday, October 10–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, European stock markets were weaker along with the Euro currency. The European Union sovereign debt crisis and specifically the countries of Greece and Spain remain a major worry for the market place. The Fitch credit rating agency Wednesday warned about a deteriorating EU debt crisis. Meantime, the International Monetary Fund said European banks may be forced to sell over $4 trillion in assets if the EU debt crisis cannot be brought under control. A German government bond auction was very well subscribed Wednesday, which underscored the recent higher levels of investor anxiety among European investors. Spain government officials have yet to formally ask for further EU financial assistance, which is perplexing many European market watchers. A formal bailout request from Spain would see the European Central Bank kick in its government bond-buying program that was announced several weeks ago.–Jim

U.S. STOCK INDEXES

S&P 500 futures: 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 bearish early today. Today, shorter-term technical resistance comes in at 1,440.00 and then at Tuesday’s high of 1,454.40. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,424.50 and then at 1,415.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices hit a fresh seven-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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is located at 2,750.00 and then at 2,762.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,725.50 and then at 2,715.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Sell stops likely reside just below technical support at 13,355 and then at 13,300. Buy stops likely reside just above technical resistance at 13,450 and then at 13,500. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day and 18-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: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. 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 bearish early today. Shorter-term resistance lies at 148 even and then at the overnight high of 148 10/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 147 10/32 and then at 147 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 today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. 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 bearish early today. Shorter-term resistance lies at the overnight high of 133.06.0 and then at this week’s high of 133.11.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 132.27.5 and then at 132.20.0. 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 today, and hit a fresh four-week high overnight. The greenback bulls are gaining some fresh upside technical momentum this week. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.31 and then at 80.50. Shorter-term support is seen at 80.00 and then at 79.75. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are near steady early today. Bulls and bears are now back on a level near-term technical playing field amid recent choppy trading. In November Nymex crude, look for buy stops to reside just above resistance at Tuesday’s high of $92.91 and then at last week’s high of $93.33. Look for sell stops just below technical support at the overnight low of $91.57 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were narrowly mixed in overnight trading. Grain traders are awaiting Thursday morning’s USDA supply and demand report. Many reckon USDA will increase the U.S. soybean production figure. The grain market bulls have faded recently amid harvest pressure and weakening worldwide demand for grains at higher price levels. Looking back at this major bull market and major weather market, the surprising element to me is that there has not been the extreme daily price volatility that was seen in previous major bull runs during weather markets.