Friday, June 14–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Gold is seeing some mild safe-haven support on news President Obama has authorized the U.S. to provide arms to Syrian rebels. This will escalate the Syrian situation that has already seen much bloodshed in that country. With U.S. arms being provided to the Syrian rebels, many will view the situation as a proxy war between the U.S. and Iran or between the U.S. and Russia. Oil prices did hit a fresh three-week high on the news. Euro zone employment fell to its lowest level of workers in seven years, it was reported Friday. Eurostat said the employment level in the Euro zone fell by 0.5% in the first quarter versus the fourth quarter of last year. Eurostat also said the annual inflation rate in the Euro zone rose to 1.4% in May versus 1.2% in April—still well below the European Central Banks target rate of 2% inflation. The market place is awaiting next Wednesday’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). Fed Chairman Bernanke will also hold a press conference following the meeting. Traders and investors will be looking for fresh information from the Fed on when it will start to wind down its quantitative easing programs that have been in place for several years. The Wall Street Journal reported Friday that it believes the Fed will gradually introduce its so-called “tapering” program and that interest rates will remain low for some time to come. European and Asian stock markets were given a slight lift Friday, partly on the Wall Street Journal Fed story easing worries the Fed could sooner take more aggressive action on ending its easy money policies. U.S. economic data due for release Friday includes the producer price index, Treasury international capital data, industrial production and capacity utilization and the University of Michigan consumer sentiment survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly lower early today, on a corrective pullback from solid gains Thursday. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,634.30 and then at this week’s high of 1,648.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,620.00 and then at 1,610.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are slightly lower early today following solid gains Thursday. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at Thursday’s high of 2,969.50 and then at 2,979.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,940.00 and then at 2,932.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are near steady early today. Buy stops likely reside just above technical resistance at Thursday’s high of 15,125 and then at 15,200. Sell stops likely reside just below technical support at 15,100 and then at 15,050. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below 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 solidly higher today on more short covering. Bears still have the overall near-term technical advantage. Prices are still in a six-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are still 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 bullish early today. Shorter-term resistance lies at the overnight high of 140 23/32 and then at 141 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 140 even and then at the overnight low of 139 27/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 September U.S. T-Notes: Prices are solidly higher early today on more short covering. Bears still have the 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 bullish early today. Shorter-term resistance lies at the overnight high of 129.22.5 and then at 130.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129.07.5 and then at 129.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading, on short covering after hitting a four-month low on Thursday. Bears still have the near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 81.210 and then at 81.510. Shorter-term support is seen at Thursday’s low of 80.710 and then at 80.500. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are firmer early today and hit a fresh three-week high overnight. Bulls have gained the slight overall near-term technical advantage. In July Nymex crude, look for buy stops to reside just above resistance at the May high of $97.38 and then at $98.00. Look for sell stops just below technical support at the overnight low of $96.42 and then at $96.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mostly firmer in overnight trading, with soybeans and corn prices up and wheat down. Soybean bulls still have the overall near-term technical advantage. Corn and wheat bears have the near-term technical edge. Weather in the U.S. Corn Belt is presently benign for the markets but will remain a dominant fundamental factor for the grains in the near term. It is my bias that another weather scare will develop in the grain markets in the coming weeks.
