Monday, July 1–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Much-anticipated China manufacturing data came out Monday. The purchasing managers’ index came in at 50.1 in June versus 50.8 in May. Any reading above 50.0 suggests growth in the manufacturing sector. The HSBC manufacturing PMI for China came in at 48.2 in June versus 49.2 in May. The HSBC June PMI data for South Korea, Taiwan and Indonesia also came in weaker on Monday. Japan’s Tankan survey showed in improvement in business sentiment in the latest quarter. Most Asian stock markets fell on the mostly weaker economic data reported Monday. Japan’s stock market did rise modestly on the Tankan data. In Europe, stock markets were mixed. The manufacturing PMI’s for Spain and Italy rose slightly in June versus May. The overall Euro zone manufacturing PMI was 48.8 in June versus 48.3 in May. It was also reported that Euro zone unemployment was at 12.1% in May. It will be a busy week of major economic data worldwide, despite the U.S. Independence holiday on Thursday, which will find many Americans taking much of the week off. The U.S. jobs report is out Friday morning, while the European Central Bank and Bank of England monthly meetings are on Thursday. Egypt unrest is in the news headlines again. Major riots are occurring in Cairo to protest leadership in that nation. Gold could be seeing some fresh safe-haven demand due to the violence in Egypt. Reports said there has been an increase in demand for physical gold coming from China. U.S. economic data due for release Monday includes the U.S. manufacturing PMI, construction spending, the ISM manufacturing report, and the Global manufacturing PMI.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today. Bulls have regained some near-term momentum, but have more work to do to suggest an uptrend can be re-established. 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 last week’s high of 1,614.20 and then at 1,625.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,593.50 and then at 1,580.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are higher early today. Bulls are working to regain upside momentum, but have more work to do in the near term to suggest prices can re-establish an uptrend on the daily chart. 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at the overnight high of 2,928.00 and then at 2,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,900.00 and then at the overnight low of 2,894.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
Dow futures: Prices are higher early today. Bulls are regaining some upside momentum, but have more work to do to suggest prices can sustain a trend higher. Buy stops likely reside just above technical resistance at Friday’s high of 14,955 and then at 15,000. Sell stops likely reside just below technical support at 14,824 and then at 14,800. Shorter-term moving averages are still 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: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower early today. Bears have the solid overall near-term technical advantage. Prices are in a two-month-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 neutral early today. Shorter-term resistance lies at the overnight high of 135 24/32 and then at last week’s high of 136 4/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 28/32 and then at 134 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 lower early today. Bears have the solid 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 neutral early today. Shorter-term resistance lies at the overnight high of 126.15.5 and then at last week’s high of 126.29.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.31.0 and then at 125.16.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading, on profit taking after prices hit a four-week high on Friday. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.470 and then at last week’s high of 83.595. Shorter-term support is seen at the overnight low of 83.330 and then at 83.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are firmer early today. Bulls have gained some upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at last week’s high of $97.82 and then at $98.00. Look for sell stops just below technical support at the overnight low of $96.07 and then at $95.50. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mixed in overnight trading. Corn was weaker while soybeans and wheat were firmer. Friday’s USDA report was fully bearish for corn, and that bearishness spilled over into the soybean and wheat markets, too. The grain market bulls have faded recently amid the generally bearish attitudes in the raw commodity sector at present. Weather in the U.S. Corn Belt remains benign at present. However, this week is a pivotal week in the grain markets. Price trends can be reversed or existing trends accelerated in this historically critical timeframe for the grain markets. Right now, the bears are heading into this important week with momentum on their side.
