Wednesday, March 6–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The buzz of the market place Wednesday morning is the new all-time record high posted by the Dow Jones Industrial Average on Tuesday. The general media picked up on that news and featured it heavily Tuesday evening. When the general media picks up on a trending market move, it’s an early clue that market move has probably just about run its course. Stock markets in Asia and Australia rallied Wednesday, in the aftermath of the U.S. stock market rally. European stocks were also mostly firmer Wednesday. A German five-year bond auction Wednesday produced the lowest yields so far this year, which shows European investors are still wary regarding a flare-up in the EU sovereign debt crisis following the recent Italian elections that produced no clear victor. Fresh EU economic data released overnight showed EU exports dropped by 0.9% in the fourth quarter, compared to the third quarter. That’s the fastest quarterly drop in almost four years. Reports overnight said South Korea’s central bank added around 20 metric tons of gold to its official reserves in February. That’s around a 25% increase in holdings by South Korea, as the country’s central bank does some value-buying. Arguably the most important U.S. economic report of the month, the employment situation report for February, is due out Friday morning. The key non-farm payroll number is expected to come in at up 157,000, while the unemployment rate is forecast at 7.8%. The European Central Bank also holds its monthly meeting and press conference on Thursday. While the ECB is expected to announce no major changes to its monetary policy, traders will closely scrutinize ECB chief Mario Draghi’s remarks at his press conference following the meeting. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, manufacturers’ shipments and inventories, the weekly DOE energy stocks report, and the Federal Reserve’s beige book.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early yesterday and hit another fresh five-year high overnight. The bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early yesterday. 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 bullish early yesterday. Yesterday, shorter-term technical resistance comes in at 1,550.00 and then at 1,565.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at the overnight low of 1,537.20 and then at Tuesday’s low of 1,524.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index futures: Prices are firmer in early trading and hit a fresh five-month high overnight. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early yesterday. Shorter-term technical resistance is located at the overnight high of 2,809.25 and then at 2,825.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the 2,780.00 and then at Tuesday’s low of 2,761.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
Dow futures: Prices are higher early yesterday and hit a fresh all-time record high overnight. The bulls have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at 14,250 and then at 14,200. Buy stops likely reside just above technical resistance at 14,300 and then at 14,350. Shorter-term moving averages are bullish early yesterday, 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 yesterday. Wyckoff’s Intra-Day Market Rating: 6.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower again early yesterday. Bulls are fading amid the rallying U.S. stock market and better investor risk appetite. Shorter-term moving averages (4- 9- 18-day) are still bullish early yesterday. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at the overnight high of 143 21/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 143 even and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 June U.S. T-Notes: Prices are weaker early yesterday. Bulls still have the slight overall near-term technical advantage but are fading. Shorter-term moving averages (4- 9- 18-day) are still bullish early yesterday. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at the overnight high of 131.17.0 and then at Tuesday’s high of 131.23.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.09.0 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The U.S. dollar index is firmer early yesterday. The greenback bulls still have the near-term technical advantage as prices hover near a six-month high. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at Tuesday’s high of 82.515 and then at last week’s high of 82.795. Shorter-term support is seen at Tuesday’s low of 82.165 and then at 82.000. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are slightly lower early yesterday. Prices are not that far above Monday’s nine-week low. Bears still have downside technical momentum. In April Nymex crude, look for buy stops to reside just above resistance at the overnight high of $91.17 and then at $92.00. Look for sell stops just below technical support at $90.00 and then at this week’s low of $89.30. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were narrowly mixed overnight. There have been better moisture patterns in the central U.S. that are working to alleviate the severe soil shortages in the region and that’s and underlying bearish factor for the grain markets. Traders pausing at mid-week, awaiting Friday morning’s USDA supply and demand report.
