OVERNIGHT/EARLY MORNING DEVELOPMENTS
The feature overnight was that raw commodity markets were stronger. The commodity bulls are clawing back, and that is supporting the stock indexes. Crude oil prices are higher, bonds and notes are steady and the U.S. stock indexes are higher in early electronic trading. The U.S. dollar is stronger versus the major currencies in very early U.S. trading. Grains were mostly higher in overnight electronic trading. There was no fresh, major market-moving news overnight.
U.S. ECONOMIC REPORTS/EVENTS
On tap today is weekly jobless claims, weekly USDA grain export sales, the leading economic indicators report, the Chicago Fed national activity index, and weekly DOE natural gas stocks.
U.S. STOCK INDEXES
The indexes are firmer in early morning electronic trading, following good gains Wednesday. Trading has become choppy this week. My bias is that trading will be choppy in the near term, amid summertime doldrums in the stock market.
September S&P 500: The shorter-term moving averages (4-, 9- and 18-day) are turning bullish. The 4-day moving average has moved above the 9-day. The 9-day is still below the 18-day moving average, but appears poised to turn back north. Short-term oscillators are favoring the bulls today. Today, key shorter-term technical support comes in 1,260.00. Light sell stops likely reside just under that level. More sell stops likely reside under shorter-term support at Wednesday’s low of 1,249.00. Shorter-term upside resistance for active traders today is at Wednesday’s high of 1,268.30. Buy stops are likely located just above that price level, and then just above shorter-term resistance at 1,272.00.
September Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are now turning bullish. The 4-day is above the 9-day moving average. The 9-day moving average is still below the 18-day, but is poised to cross above it as soon as today. Short-term oscillators are favoring the bulls today. Today, shorter-term technical support is located at this week’s low of 1,560.00. Heavier sell stops likely reside just below that level, and then below support at 1,555.00. On the upside, short-term resistance is seen at Wednesday’s high of 1,605.00. Heavier buy stops are likely located just above that level. More buy stops are likely located just above this month’s high of 1,646.00.
September Dow: Bulls are gaining near-term power. For today, sell stops likely reside just below support at Wednesday’s low of 11,057 and then just below support at 11,000. Heavier buy stops likely reside just above shorter-term technical resistance at Wednesday’s high of 11,210 and then just above resistance at 11,250. Shorter-term moving averages are turning bullish, as the 4-day moving average is above the 9-day, and poised to move above the 18-day today. The 9-day is still below the 18-day moving average, but is turning back higher. Shorter-term oscillators favor the bulls today.
U.S. TREASURY BONDS AND NOTES
Both notes and bond prices were near steady in overnight trading in Chicago. Bears still have the near-term technical momentum on their side.
September U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are now fully bearish. The 4-day moving average is below the 9-day average and the 18-day. The 9-day is now below the 18-day. Slow stochastics still show the market being oversold and due for a corrective bounce very soon. Shorter-term resistance lies at 106 20/32–Wednesday’s high–and then at 106 25/32–this week’s high. Buy stops likely lie just above those levels. Shorter-term technical support lies at this week’s low of 106 6/32 and then at 106 even. Sell stops likely reside just below those levels.
September U.S. T-Notes: Prices are slightly weaker in early morning dealings. Slow stochastics still show the market as being short-term oversold and due for a rebound very soon. Buy stops likely reside just above shorter-term resistance at Wednesday’s high of 104.23.5, and then just above resistance at this week’s high of 104.28.5. Shorter-term moving averages are fully bearish. The 4-day moving average is below the 9-day and 18-day average. The 9-day is below the 18-day moving average. A move in prices below shorter-term support at Tuesday’s low of 104.17.5 would likely uncover heavier sell stops. More heavy sell stop orders are likely located just below strong support at the May low of 104.13.0.
CURRENCIES
The September U.S. dollar index is solidly higher in early morning electronic dealings and the currencies are lower. Trading in the currencies has become choppy this week, but within a trading range. Dollar index bulls still have some near-term technical momentum. The dollar index finds key shorter-term technical resistance at this week’s high of 86.09. Shorter-term support is seen at 85.50 and then at the overnight low of 85.28. The September Euro today finds sell stop orders are likely located at shorter-term technical support at the overnight low of 1.2656 and then heavier sell stops just below support at the June low of 1.2609. Shorter-term technical resistance for the Euro is seen at 1.2700 and then at this week’s high of 1.2755. Buy stops likely reside just above those shorter-term resistance levels.
