* LATEST MARKET DEVELOPMENTS *
Trading activity was uneventful in Asia and Europe overnight. Attention turns to a heavy slate of U.S. economic data to be released Tuesday. On tap includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NFIBs small business optimism index, import and export prices, retail sales, manufacturing and trade inventories, and the World Bank economic prospects report.
In overnight news, European Union industrial production was reported at up 1.8% in November from October and up 3.0% year on year. That’s the best reading in over three years. This continues an impressive trend of better economic data coming out of the Euro zone.
Wyckoff’s Daily Risk Rating: 6.0 (There is a heavy slate of U.S. economic data Tuesday, which could move markets.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
–Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer in early U.S. trading on a corrective bounce from strong selling pressure Monday. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 1,825.00 and then at Monday’s high of 1,838.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,809.80 and then at 1,800.00. 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 on a corrective bounce. 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 to bearish early today. Shorter-term technical resistance is located at 3,525.00 and then at 3,550.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,503.25 and then at Monday’s low of 3,492.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
Dow futures: Prices are slightly higher in early U.S. trading on a corrective bounce. Buy stops likely reside just above technical resistance at 16,250 and then at 16,300. Sell stops likely reside just below technical support at 16,200 and then at Monday’s low of 16,185. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are lower early today on a downside correction after hitting a three-week high on Monday. The bulls have gained some upside momentum recently. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 131 3/32 and then at Monday’s high of 131 8/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 130 18/32 and then at 130 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 March U.S. T-Notes: Prices are lower early today on a downside correction after hitting a three-week high on Monday. Bulls have gained some upside near-term technical momentum recently. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 124.18.5 and then at Monday’s high of 124.20.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 124.07.5 and then at 124.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly higher early today and did hit a two-week low overnight. The greenback bulls are fading. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.790 and then at 81.000. Shorter-term support is seen at the overnight low of 80.540 and then at the January low of 80.430. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
February Nymex crude oil prices are slightly higher early today on tepid short covering after hitting a 6.5-month low last week. Bears have the solid overall near-term technical advantage. In February Nymex crude, look for buy stops to reside just above resistance at the overnight high of $92.33 and then at Monday’s high of $92.88. Look for sell stops just below technical support at last week’s low of $91.24 and then at $91.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were narrowly mixed overnight. It appears a major market low is in place in corn. I cannot see wheat and corn pulling in divergent paths, and with corn being arguably the strongest market of the two, I suspect wheat may also be close to a market low. Soybean bulls and bears are struggling for control amid choppy trading. Corn and soybean traders continue to keep an eye on South American weather, which is now heating up a bit and bears extra close examination in the coming days. I have to wonder if the seasonal “February Break” phenomenon paid an early visit to the grain markets this year.
