OVERNIGHT/EARLY MORNING DEVELOPMENTS
The feature in overnight/early morning trading is solid gains in the crude oil market, following strong losses Monday. The Middle East tensions are still very high, and that will keep all traders on edge again today. Gold prices are modestly lower in early trading today. The U.S. dollar is slightly lower versus the other major currencies. Stock indexes are narrowly mixed and near steady in early electronic trading. U.S. Treasuries are also slightly lower.
U.S. ECONOMIC REPORTS/EVENTS
On tap today is the ICSC store sales index, the Producer Price Index report, the NAHB housing index, and Redbook retail sales. Fed governor Warsh speaks in Washington, D.C. The PPI report will be most important to traders.
U.S. STOCK INDEXES
The indexes are narrowly mixed in early morning electronic trading. Bears still have some downside technical momentum, amid record-high oil prices and heightened tensions in the Middle East. Buying interest will continue to be limited by these factors, at least in the near term.
September S&P 500: The shorter-term moving averages (4-, 9- and 18-day) are still fully bearish. The 4-day moving average is below the 9-day and 18-day today. The 9-day is moving below above the 18-day moving average. Short-term oscillators are neutral today, but slow stochastics are still into oversold territory. Today, key shorter-term technical support comes in at Monday’s low of 1,234.70. Sell stops likely reside just under that level. Heavier sell stops likely reside under solid technical support at the June low of 1,229.20. Shorter-term upside resistance for active traders today is Monday’s high of 1,247.20. Light buy stops are likely located just above that price level, and more buy stops are likely located just above chart resistance at Friday’s high of 1,251.30.
PIVOT POINT LEVELS FOR S&P 500:
1st Support:—— 1,234.40
2nd Support:—— 1,228.30
1st Resistance:— 1,246.90
2nd Resistance:— 1,253.30
September Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish. The 4-day is below the 9-day and 18-day moving averages. The 9-day moving average is below the 18-day. Short-term oscillators are neutral to bullish today, as slow stochastics are well into oversold territory. Today, shorter-term technical support is located at Monday’s low of 1,465.00. Sell stops likely reside just below that level, and then more sell stops likely reside below support at 1,450.00. On the upside, short-term resistance is seen at Monday’s high of 1,487.00. Buy stops are likely located just above that level. More buy stops are then likely located just above resistance at 1,500.00.
PIVOT POINT LEVELS FOR NASDAQ:
1st Support:—— 1,467.75
2nd Support:—— 1,455.50
1st Resistance:— 1,489.75
2nd Resistance:— 1,499.50
September Dow: For today, heavy sell stops likely reside just below support at the June contract low of 10,740 and then just below support at of 10,700. Light buy stops likely reside just above shorter-term technical resistance at Monday’s high of 10,850 and then more buy stops just above resistance at Friday’s high of 10,910. Shorter-term moving averages are fully bearish today, as the 4-day moving average is below the 9-day. The 9-day is moving below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are turning bullish today.
PIVOT POINT LEVELS FOR DOW:
1st Support:—— 10,753
2nd Support:—— 10,708
1st Resistance:— 10,846
2nd Resistance:— 10,894
U.S. TREASURY BONDS AND NOTES
Both notes and bond prices are slightly lower in early trading in Chicago. Technical odds have increased that near-term lows are in place in bonds and notes. Also, the Middle East tensions will limit selling interest in the bonds again today.
September U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are still fully bullish today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators are bearish today. Shorter-term resistance lies at the overnight high of 107 18/32. Buy stops likely lie just above that level. Heavier buy stops likely reside just above solid technical resistance last week’s high of at 107 26/32. Shorter-term technical support lies at Monday’s low of 107 6/32. Sell stops likely reside just below that level. More sell stops are likely located below support at 107 even.
PIVOT POINT LEVELS FOR T-BONDS:
Pivot:———– 107 14/32
1st Support:—– 107 8/32
2nd Support:—– 107 1/32
1st Resistance:– 107 21/32
2nd Resistance:– 107 27/32
September U.S. T-Notes: Shorter-term oscillators are bearish again today. Buy stops likely reside just above shorter-term resistance the overnight high of 105.11.0, and then heavier buy stops just above solid resistance at last week’s high of 105.16.5. Shorter-term moving averages are fully bullish again today. The 4-day moving average is above the 9-day, and is above the 18-day. The 9-day is above the 18-day moving average. Sell stop orders are likely located just below support at Monday’s low of 105.04.0, and then more sell stops just below support at 105.00.0.
PIVOT POINT LEVELS FOR T-NOTES:
1st Support:—— 105.04.0
2nd Support:—— 104.31.0
1st Resistance:— 105.15.0
2nd Resistance:— 105.21.0