Wednesday, July 10–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place is awaiting the minutes of the last U.S. Federal Reserve FOMC meeting, due out Wednesday afternoon. Recent FOMC statements and minutes of meetings have been markets-movers. Traders and investors will parse the FOMC minutes for clues on when the Fed will start to “taper” its monthly bond-buying program, also known as quantitative easing. The consensus in the market place at present is that the Fed will start to cut back its bond purchases sometime later this year. Fed Chairman Ben Bernanke will also give a speech later Wednesday, which could also be market-sensitive. China’s latest manufacturing report was released Wednesday and it came in on the weak side. Exports fell 3.1% in June, on an annualized basis. A 3.3% gain was expected. Chinese imports were down 0.7% on the year, while a 5.5% increase was forecast. The news had a somewhat limited impact on the market place, as the Chinese premiere said Wednesday China will continue on its path of long-term reform. European stock markets were pressured Wednesday after the Standard & Poors ratings agency lowered Italy’s sovereign credit rating. The European Union’s sovereign debt crisis has been on the back burner of the market place for several months, but the situation has never been fully cleared up and could at any time heat up to roil world markets. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, wholesale trade, the weekly DOE energy stocks report, and the FOMC minutes.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly lower early today on some mild profit taking after recent good gains. 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 to bullish early today. Today, shorter-term technical resistance comes in at Tuesday’s 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 Tuesday’s low of 1,636.60 and then at this week’s low of 1,626.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are slightly lower 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 neutral early today. Shorter-term technical resistance is located at Tuesday’s high of 2,985.00 and then at 3,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 2,959.00 and then at this week’s low of 2,948.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
Dow futures: Prices are slightly lower early today on mild profit taking from recent gains. Buy stops likely reside just above technical resistance at Tuesday’s high of 15,255 and then at 15,270. Sell stops likely reside just below technical support at Tuesday’s low of 15,180 and then at this week’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: 5.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are near 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 23/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 10/32 and then at 133 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 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 Tuesday’s high of 125.19.5 and then at 125.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Tuesday’s 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 lower in early U.S. trading, on profit taking from recent strong gains. Bulls still have the solid overall near-term technical advantage as the index scored a three-year high Tuesday. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 84.835 and then at Tuesday’s high of 84.965. Shorter-term support is seen at Tuesday’s low of 84.310 and then at 84.065. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are solidly higher early today and hit a fresh 14-month high overnight. Bulls have good upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at $106.00 and then at $107.00. Look for sell stops just below technical support at the overnight low of $104.21 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 7.0
GRAINS
Markets were mostly higher in overnight trading on more short covering and bargain hunting. Weather forecasts for the U.S. Corn Belt are calling for hot conditions and less rain later this week and into next week. That’s now a bullish factor that is helping to drive prices higher. With much of the U.S. corn crop being planted late, the key pollination stage of plant growth will now occur during the late-July timeframe, which is typically the hottest part of the summer. Temperatures above 90 degrees during pollination can stunt yield potential for the corn crop. Grain market bears still presently have the near-term technical advantage. But the bulls are having a good week so far. The monthly USDA supply and demand report is out Thursday.
