Tuesday, June 11–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
World stock and bond markets, and gold, are under strong selling pressure Tuesday, with the yield on Greek government bonds pushing above 10% amid a big “risk-off” trading day in the market place. There are increasing concerns the major central banks of the world could begin turning off their easy money tappers sooner rather than later. The Bank of Japan standing pat on its monetary policy at this week’s BOJ meeting is the latest clue that the days of major central bank quantitative easing of their monetary policies could be limited. On Monday the Standard & Poors credit rating agency raised the U.S. credit rating from negative to stable, in another sign the U.S. economy is gaining steam–and which also suggests the Fed may no longer need to keep goosing the economy with huge amounts of fresh cash every month. European stock markets were also pressured by rising bond yields in the financially troubled European Union countries of Span and Italy. Even the yield on safe-haven German bonds crept up Tuesday. There were street protests in Turkey Tuesday following government austerity measures to deal with its financial problems. Meantime, the German courts are this week deciding if part of the EU’s financial bailout mechanism is even constitutional in Germany. All of the above hints that the European Union’s sovereign debt crisis could soon move from a simmer to a boil in the market place. U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business optimism index, and the Manpower quarterly employment survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are lower early today. Bulls have the overall near-term technical advantage but have faded recently. 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 1,642.20 and then at 1,650.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,618.20 and then at 1,605.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index futures: Prices are lower early today. Bulls still have the overall near-term technical advantage but have faded recently. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 2,975.00 and then at the overnight high of 2,989.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,950.00 and then at 2,940.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
Dow futures: Prices are lower early today. Bulls still have the overall near-term technical advantage, but have faded recently. Buy stops likely reside just above technical resistance at 15,150 and then at 15,200. Sell stops likely reside just below technical support at 15,090 and then at 15,000. Shorter-term moving averages are 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower again today and hit another fresh contract low. Bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. 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 138 16/32 and then at 139 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 138 even and then at 137 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5 September U.S. T-Notes: Prices are solidly lower early today and hit a fresh contract low overnight. Bears have the strong 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 128.16.0 and then at the overnight high of 128.26.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 128.06.0 and then at 128.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5
U.S. DOLLAR INDEX
The September U.S. dollar index is lower in early U.S. trading. Bulls have faded badly recently. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.000 and then at Monday’s high of 82.355. Shorter-term support is seen at the overnight low of 81.605 and then at 81.510. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are lower early today. Not much new. Bulls and bears are still on a level near-term technical playing field amid choppy trading recently. In July Nymex crude, look for buy stops to reside just above resistance at $95.00 and then at the overnight high of $95.91. Look for sell stops just below technical support at $94.00 and then at $93.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were firmer in overnight trading, on a corrective bounce from Monday’s losses. Given the dour mood in the overall market place so far Tuesday morning, the ability of the grain futures markets to hold prices above unchanged is an encouraging signal for the bulls. Soybean bulls still have some near-term technical momentum. Corn trading remains choppy. Wheat bears remain in technical control. Weather in the U.S. Corn Belt will remain a dominant fundamental factor for the grains in the near term. Forecasts for the region are for drier and warmer conditions in the coming days, which is a mildly bearish factor for corn and soybeans. Traders are awaiting Wednesday’s monthly USDA supply and report.
