Thursday, September 5–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The world market place is quieter and on hold Thursday morning, as there were no major economic or geopolitical developments overnight, and as major world economic data is on deck. The Bank Japan kept its monetary policy steady at Thursday’s meeting, which was expected. The Bank of England and European Central Bank were holding their monthly monetary policy meetings on Thursday. Both were expected to make no major adjustments to their policies. However, as usual the wording of the central banks’ statements will be closely scrutinized for clues on future monetary policy direction. Also, Thursday marks the beginning of the G-20 political and finance ministers meeting in Russia. There is a big batch of U.S. economic data due for release Thursday, including the weekly jobless claims report, the Challenger job-cut report, the ADP national employment report, revised productivity and costs, manufacturing shipments, orders and inventories, the global services PMI, the weekly DOE liquid energy stocks report, ICSC chain store sales trends, and the ISM non-manufacturing report. However, the big economic news of the week and of the month will be Friday morning’s U.S. jobs report. Many market watchers believe Friday’s jobs data will tip the Federal Reserve’s hand on when the “tapering” of U.S. monetary policy will begin. Forecasts call for the key U.S. non-farm jobs number to come in at up 175,000 in August. The overall unemployment rate is expected to be unchanged from July, at 7.4%. The market place is still concerned regarding the U.S. threat to attack Syria after the Assad regime allegedly used chemical weapons against Syrian citizens. However, the aforementioned economic data is presently dominating focus of the market place. The U.S. Congress is mostly backing President Obama on his notion to use U.S. firepower to strike Syria. It is unlikely a U.S. military strike will occur this week, as congressional debate and voting on the matter will not be completed likely until sometime next week.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early today. Prices are still in a four-week-old downtrend on the daily bar chart, but now just barely. 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 to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,656.50 and then at 1,667.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,650.40 and then at Wednesday’s low of 1,635.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are slightly higher early today. The bulls have the overall near-term technical advantage and have regained upside near-term momentum. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is located at the overnight high of 3,135.00 and then at the August high of 3,148.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,125.00 and then at 3,113.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are near steady early today. Prices are still in a four-week-old downtrend on the daily bar chart. Buy stops likely reside just above technical resistance at Wednesday’s high of 14,940 and then at 15,000. Sell stops likely reside just below technical support at 14,900 and then at 14,845. Shorter-term moving averages are still bearish early today, as the 4-day moving average is below 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are lower early today and hovering not far above the recent contract low. Bears have the solid overall near-term technical advantage. 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 131 even and then at the overnight high of 131 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 21/32 and then at 130 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 September U.S. T-Notes: Prices are weaker early today and hit a fresh contract low overnight. Bears have the strong overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 122.24.0 and then at 123.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 122.17.0 and then at 122.10.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.0

U.S. DOLLAR INDEX

The September U.S. dollar index is near steady early Thursday. Bulls still have a bit of near-term technical momentum on their side. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.685 and then at this week’s high of 82.970. Shorter-term support is seen at this week’s low of 82.350 and then at 82.260. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

October Nymex crude oil prices are firmer early today. Crude bulls have the overall near-term technical advantage, amid upbeat economic data coming out of the world’s major countries, and amid the Syria tensions. In October Nymex crude, look for buy stops to reside just above resistance at the overnight high of $108.04 and then at this week’s high of $108.83. Look for sell stops just below technical support at $107.00 and then at $106.77. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were weaker overnight, with soybeans again leading losses. The soybean market had been the leader on the upside, but bean bulls have faded badly. Corn and wheat bears remain in firm technical command. While the extended weather forecasts for the U.S. Corn Belt call for very warm and dry conditions in the region, it appears the late-summer weather market has played out in the grain futures markets. It appears yield damage to the crops has already been mostly factored into present prices. For grain market prices to gain more upside in the near term, some new fundamental news will have to occur. Maybe that will come from the demand side, or from actual yield results once the corn and soybean harvests begin in earnest. The grains could also react to key “outside market” forces in the near term.