Wednesday, August 14–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, the European Union has emerged from its six-quarter economic recession, EU data showed Wednesday. The EU second-quarter GDP rose 0.3% from the first quarter. However, the year-on-year figure was down 0.7%. The German government auctioned its 10-year bond Wednesday and it fetched a yield of 1.80%, which is the highest level in a year and a half. That also suggests European investors have better feelings about the recovery of the European Union economy. Recent EU data has shown slight improvement, overall. Traders are also awaiting more U.S. economic data this week. Many believe the U.S. data will show an improving U.S. economy, one that is possibly strong enough to begin to wean it from the Fed’s monthly bond-buying program, also known as quantitative easing. Many also look for the Federal Reserve to announce it is “tapering” is bond buying at its next FOMC meeting in September. The market place is keeping a close eye on developments in Egypt. Anti-government demonstrations in Cairo turned deadly Wednesday, with 10 civilians reportedly killed. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, and the weekly DOE liquid energy stocks report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly lower early today. Bulls still 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 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 this week’s high of 1,694.40 and then at the record high of 1,705.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the this week’s low of 1,675.40 and then at 1,670.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are near steady early today and hovering near Tuesday’s 12-year high. The 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. 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 Tuesday’s high of 3,148.00 and then at 3,160.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,131.25 and then at 3,115.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly lower early today. Bulls still have the near-term technical advantage. Buy stops likely reside just above technical resistance at 15,450 and then at Tuesday’s high of 15,470. Sell stops likely reside just below technical support at 15,350 and then at Tuesday’s low of 15,310. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near steady early today. Bears have the solid overall 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 the overnight high of 132 30/32 and then at 133 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at Tuesday’s low of 132 12/32 and then at 132 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are near steady early today. Bears have the solid overall 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 the overnight high of 125.29.0 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.18.0 and then at 125.10.0 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, on more short covering. While the bears still have the overall near-term technical advantage, the greenback bulls are having a good week this week. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 82.000 and then at 82.250. Shorter-term support is seen at the overnight low of 81.745 and then at 81.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are weaker early today. Bulls still have the overall near-term technical advantage. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $106.69 and then at this week’s high of $107.20. Look for sell stops just below technical support at the overnight low of $105.92 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were mixed in overnight trading. Corn was slightly higher and soybeans and wheat were weaker. Corn and soybean market bulls have quickly faded after the surprising bullish results of Monday’s monthly USDA supply and demand report. Corn and wheat market bulls need to show fresh power yet this week, to avoid a fresh leg down in prices in the near term. Dry weather in parts of the U.S. Corn Belt is a bullish input for soybeans and to a lesser degree corn.
