Tuesday, July 9–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Gold prices were boosted overnight on news that China’s inflation rate heated up a bit. China’s June consumer price index was up 2.7% on an annualized basis, compared to a 2.1% rate in May and above the consensus forecast for a 2.5% rise. Gold and other hard assets have traditionally been used as a hedge against inflationary price pressures. European stock markets rallied Tuesday on ideas of better upcoming corporate earnings reports. There also appeared to be easing investor concerns about the political, financial and economic health of the sickly European Union countries Greece and Portugal. Meantime, Asian stocks were mostly higher Tuesday as traders and investors in that region shrugged off the China inflation data as non-problematic. The civil unrest in Egypt is still a front-burner issue for the world market place. There were no major developments overnight, but the situation still has traders uneasy. The crisis in Egypt could quickly escalate and even spread to other countries in the Middle East. Gold has seen some safe-haven investor demand due to the recent political upset and violence in Egypt. The market place is awaiting the Wednesday release of China’s latest trade report and the minutes of the last U.S. Federal Reserve FOMC meeting. These two data points are the most important economic readings of the week. U.S. economic data due for release Tuesday includes the NFIB small business index, the weekly Goldman Sachs and Johnson Redbook retail sales reports, the employment trends index and the IMF world economic outlook update.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are higher early today and hit a fresh three-week high overnight. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the June high 1,648.70 and then at 1,672.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,636.60 and then at Monday’s low of 1,626.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index futures: Prices are higher early today. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at Monday’s high of 2,978.25 and then at 3,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,959.00 and then at Monday’s low of 2,948.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
Dow futures: Prices are higher early today and hit a fresh three-week high overnight. Buy stops likely reside just above technical resistance at 15,250 and then at 15,270. Sell stops likely reside just below technical support at 15,160 and then at Monday’s low of 15,130. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bullish early today. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are steady early today. Bears still have the solid overall near-term technical advantage. Prices are in a nine-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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 133 21/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133 even and then at 132 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are steady 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 to bearish early today. Shorter-term resistance lies at 125.16.0 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight contract low of 125.04.0 and then at 125.00.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading. Bulls still have the solid overall near-term technical advantage as the index hovers near a three-year high scored last week. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 84.595 and then at 84.835. Shorter-term support is seen at the overnight low of 84.310 and then at 84.065. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are slightly lower early today and are seeing mild profit taking after hitting a 14-month high on Monday. Bulls still have upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at the overnight high of $103.40 and then at Monday’s high of $104.12. Look for sell stops just below technical support at $102.00 and then at $101.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were higher in overnight trading on more short covering and some fresh bargain hunting. Recent good export demand for U.S. grains and weather forecasts for the U.S. Corn Belt that show more heat and less rain are near-term bullish factors. It’s very likely going to take a weather market scare in the Corn Belt in the next few weeks to jump-start a significant rally in the grain markets. Grain market bears still presently have the near-term technical advantage. The monthly USDA supply and demand report is out Thursday.
