Thursday, November 15–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, European stocks were lower on fresh economic news that suggested the European Union countries are in collective recession. Gross domestic product in the Euro zone decreased 0.4% in the third quarter, on an annualized basis, to mark the second straight quarter of decline and four quarters of no growth in the zone. The major economies of Germany and France did show modest growth in the third quarter, which did mitigate the overall contraction in the Euro zone. Asian stocks declined overnight, in part on the U.S. “fiscal cliff” worries. Negotiations and machinations from the U.S. lawmakers on the matter will be very closely scrutinized and parsed in the coming few weeks. It is likely that Democrats and Republicans will reach some form of agreement on the matter before the end of the year–but not without drama in the meantime. On the geopolitical front, Israel’s assassination of the Hamas military leader Wednesday and Israel’s pledge to take out more Hamas leaders has the Middle East region even more uneasy. This would be an underlying bullish supportive factor for safe-haven gold, the U.S. dollar and U.S. Treasuries should military action in that region escalate.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today and hovering near a 3.5-month low. Bears still have some downside momentum. 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 early today. Today, shorter-term technical resistance comes in at the overnight high of 1,358.90 and then at 1,375.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,349.70 and then at 1,340.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are near steady early today and are hovering near a 3.5-month low. 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 to bearish early today. Shorter-term technical resistance is located at 2,550.00 and then at 2,575.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,525.00 and then at the July low of 2,516.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
Dow futures: Prices are weaker early today and hovering near a 3.5-month low. Sell stops likely reside just below technical support at 12,500 and then at 12,450. Buy stops likely reside just above technical resistance at 12,600 and then at 12,650. 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 neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower early today and are seeing some profit taking from recent gains. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 152 7/32 and then at this week’s high of 152 15/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 151 17/32 and then at this week’s low of 151 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
December U.S. T-Notes: Prices are weaker early today on profit taking. The bulls still maintain the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 134.03.0 and then at last week’s high of 134.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.26.0 and then at this week’s low of 133.22.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is firmer in early U.S. trading today and hovering near a two-month high. Bulls have upside near-term momentum on their side. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at this week’s high of 81.32 and then at 81.50. Shorter-term support is seen at the overnight low of 81.09 and then at this week’s low of 80.94. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are near steady early today. Bears still have the overall near-term technical advantage as a two-month-old downtrend is in place on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at $87.00 and then at $87.50. Look for sell stops just below technical support at $86.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mixed but mostly weaker in overnight trading. The grain market bears still have some downside momentum. Fresh near-term chart damage has been inflicted in soybean, corn and wheat futures this week. My bias is still that there is not strong selling pressure left in the grain markets at present price levels.
