Tuesday, July 23–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

It’s another quiet, summertime day in the market place as U.S. trading is set to get under way. Overnight, Asian stock markets were supported on reports that China’s premier said China’s economic growth needs to be above a 7% annual pace in order to reach China’s goal of doubling the size of its economy this decade. Last week, China’s second-quarter GDP was reported at a 7.5% annual clip. The premier’s comments suggested China will focus more on economic stimulus. A key Chinese manufacturing report is due out Wednesday. European stocks were lifted modestly on the China news. U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the monthly house price index, and the Richmond Fed business survey.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher early today and hit another record high overnight. Bulls have the solid overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at 1,700.00 and then at 1,710.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,685.70 and then at 1,675.40. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are slightly higher early today. The bulls have the overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,060.00 and then at 3,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 3,038.50 and then at last week’s low of 3,030.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today and hovering near last week’s record high. Bulls have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at the all-time high of 15,530 and then at 15,600. Sell stops likely reside just below technical support at Monday’s low of 15,465 and then at 15,400. 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are lower early today. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 135 22/32 and then at Monday’s high of 136 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 135 even and then at 134 17/32. 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. Bears have the overall near-term technical advantage, but the bulls have gained some momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 127.00.0 and then at the overnight high of 127.07.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.26.5 and then at 126.19.5 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 firmer in early U.S. trading, on tepid short covering. Bulls have faded badly recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.50 and then at Monday’s high of 82.740. Shorter-term support is seen at Monday’s low of 82.130 and then at 82.000. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are lower early today on profit taking from recent gains. Bulls still have the overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at $106.50 and then at the overnight high of $107.22. Look for sell stops just below technical support at the overnight low of $105.80 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed but mostly weaker in overnight trading. The U.S. Corn Belt has received spotty rains the past few days, but temperatures have cooled down significantly right during the key pollination stage of corn crop development. That’s bearish and is limiting buying interest across the grains complex. Some rain chances are also in the forecast for this week, along with non-threatening hot temperatures.The key “outside markets” are also in a bearish posture Tuesday morning, as the U.S. dollar index is firmer and crude oil prices are lower. Technically, the corn and wheat bears are in full control, while soybean bulls still possess the slight near-term advantage.

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher early today and hit another record high overnight. Bulls have the solid overall near-term technical advantage. 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 neutral early today. Today, shorter-term technical resistance comes in at 1,700.00 and then at 1,710.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,685.70 and then at 1,675.40. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are slightly higher early today. The bulls have the overall near-term technical advantage. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,060.00 and then at 3,075.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 3,038.50 and then at last week’s low of 3,030.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today and hovering near last week’s record high. Bulls have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at the all-time high of 15,530 and then at 15,600. Sell stops likely reside just below technical support at Monday’s low of 15,465 and then at 15,400. 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are lower early today. Bears have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 135 22/32 and then at Monday’s high of 136 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 135 even and then at 134 17/32. 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. Bears have the overall near-term technical advantage, but the bulls have gained some momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at 127.00.0 and then at the overnight high of 127.07.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.26.5 and then at 126.19.5 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 firmer in early U.S. trading, on tepid short covering. Bulls have faded badly recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.50 and then at Monday’s high of 82.740. Shorter-term support is seen at Monday’s low of 82.130 and then at 82.000. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are lower early today on profit taking from recent gains. Bulls still have the overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at $106.50 and then at the overnight high of $107.22. Look for sell stops just below technical support at the overnight low of $105.80 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed but mostly weaker in overnight trading. The U.S. Corn Belt has received spotty rains the past few days, but temperatures have cooled down significantly right during the key pollination stage of corn crop development. That’s bearish and is limiting buying interest across the grains complex. Some rain chances are also in the forecast for this week, along with non-threatening hot temperatures.The key “outside markets” are also in a bearish posture Tuesday morning, as the U.S. dollar index is firmer and crude oil prices are lower. Technically, the corn and wheat bears are in full control, while soybean bulls still possess the slight near-term advantage.