Wednesday, March 13–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, a German two-year note auction saw the notes (also called Schatz) fetch strong demand with a yield of only 0.06%. This suggests there is a bit keener risk aversion in the European market place, likely due to the uncertainty regarding Italy’s recent elections and due to recent downbeat economic data coming out of the European Union. On Wednesday it was reported that factory output in the 17 EU countries declined by 0.4% in January from December. There is also an Italian bond auction set for Wednesday, which will be closely monitored as a test of investor appetite for the troubled country’s debt. The Fitch credit ratings agency last week downgraded Italy’s credit rating. European stocks were weaker on Wednesday. Asian stocks were also down Wednesday amid the recent worries about China’s economy slowing down. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, import and export price indexes, retail sales, manufacturing and trade inventories and sales, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early yesterday on profit taking. The bulls still 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 neutral to bearish early yesterday. Yesterday, shorter-term technical resistance comes in at this week’s high of 1,551.40 and then at 1,565.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at this week’s low of 1,540.60 and then at 1,530.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker in early trading on profit taking. Bulls still have the 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early yesterday. Shorter-term technical resistance is located at the overnight high of 2,802.50 and then at last week’s high of 2,817.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 2,782.75 and then at 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early yesterday on profit taking. The bulls still have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at Tuesday’s low of 14,345 and then at this week’s low of 14,310. Buy stops likely reside just above technical resistance at Tuesday’s record high of 14,400 and then at 14,450. 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 neutral early yesterday. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer early yesterday on more short covering. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early yesterday. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early yesterday. Shorter-term resistance lies at 142 even and then at 142 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 141 13/32 and then at 141 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5June U.S. T-Notes: Prices are firmer early yesterday on more short covering. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early yesterday. Shorter-term resistance lies at 130.23.5 and then at 131.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.12.5 and then at 130.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The U.S. dollar index is firmer early yesterday. The greenback bulls have the overall near-term technical advantage as prices hover not far below a seven-month high scored last week. Slow stochastics for the dollar index are neutral early yesterday. The dollar index finds shorter-term technical resistance at Tuesday’s high of 83.060 and then at last week’s high of 83.160. Shorter-term support is seen at the overnight low of 82.600 and then at 82.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are slightly higher early yesterday. Bulls are gaining a bit of upside momentum following recent gains.In April Nymex crude, look for buy stops to reside just above resistance at $93.00 and then at Tuesday’s high of $93.47. Look for sell stops just below technical support at the overnight low of $92.47 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mixed overnight. The soybean and corn market bulls still have some upside technical momentum. But the wheat market bulls remain very weak, which is also keeping a lid on price strength in corn and soybeans. Wheat will have to show some significant price strength in the near term in order for corn and soybeans to gain much more upside power.
