Friday, February 19–Jim Wyckoff’s Morning Web Log
****Note: I am out of the office today and my friend and fellow trader/analyst Ken Seehusing is producing today’s report. Jim
OVERNIGHT/EARLY MORNING DEVELOPMENTS
The STOCK INDEXES & MARKETS
The March NASDAQ 100 was lower due to profit taking overnight as it consolidates some of this month’s rally. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices arepossible near-term. If March extends this month’s rally, the 62% retracement level of the January-February decline crossing at 1827.61 is the next upside target. Closes below the 20-day moving average crossing at 1776.75 would confirm that a short-term top has been posted. First resistance is Thursday’s high crossing at 1824.75. Second resistance is the 62% retracement level of the January-February decline crossing at 1827.61. First support is the 10-day moving average crossing at 1777.80. Second support is the 20-day moving average crossing at 1776.75. The March NASDAQ 100 was down 9.50 pts. at 1811.25 as of 5:53 AM CST. Overnight action sets the stage for a lower opening by March NASDAQ 100 when the day session begins later this morning.
The March S&P 500 index was lower due to profit taking overnight as it consolidates some of this month’s rally. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If March extends this month’s rally, the 75% retracement level of the January-February decline crossing at 1121.12 is the next upside target. Closes below the 10-day moving average crossing at 1079.66 are needed to confirm that a short-term top has been posted. First resistance is Thursday’s high crossing at 1106.70. Second resistance is the 75% retracement level of the January-February decline crossing at 1121.12. First support is the 20-day moving average crossing at 1082.66. Second support is the 10-day moving average crossing at 1079.66. The March S&P 500 Index was down 8.30 pts. at 1097.30 as of 5:56 AM CST. Overnight action sets the stage for a lower opening by the March S&P 500 index when the day session begins later this morning.
March T-bonds was higher due to short covering overnight as it consolidates some of this week’s decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If March extends this week’s decline, the 75% retracement level of the December-February rally crossing at 115-25 is the next downside target. Closes above the 20-day moving average crossing at 117-32 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 117-20. Second resistance is the 20-day moving average crossing at 117-32. First support is Thursday’s low crossing at 115-29. Second support is the 75% retracement level of the December-February rally crossing at 115-25.
ENERGY MARKETS
March crude oil was lower due to profit taking overnight as it consolidates some of the rally off this month’s low. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If March extends this month’s rally, the 75% retracement level of the January-February decline crossing at 80.72 is the next upside target. Closes below the 20-day moving average crossing at 74.93 would confirm that a short-term top has been posted. First resistance is Thursday’ s high crossing at 79.29. Second resistance is the 75% retracement level of the January-February decline crossing at 80.72. First support is the 10-day moving average crossing at 75.21. Second support is the 20-day moving average crossing at 74.93.
CURRENCIES
The March Dollar was higher overnight and tested the 50% retracement level of the 2009-decline crossing at 81.32. Stochastics and the RSI are diverging but are turning bullish signaling that sideways to higher prices are possible near-term. If March extends this winter’s rally, the 62% retracement level of the 2009-decline crossing at 82.92 is the next upside target. Closes below the 20-day moving average crossing at 79.85 are needed to confirm that a short-term top has been posted. First resistance is the overnight high crossing at 81.43. Second resistance is the 62% retracement level of the 2009-decline crossing at 82.92. First support is the 10-day moving average crossing at 80.35. Second support is the 20-day moving average crossing at 79.85.
The March Euro was lower overnight and tested the 62% retracement level of the 2008-2009-rally crossing at 134.493 as it extended the decline off December’s high. Stochastics and the RSI are diverging but are turning bearish again signaling that additional weakness is possible near-term. If March extends the decline off December’s high, the 75% retracement level of the 2008-2009-rally crossing at 130.867 is the next downside target. Closes above the 20-day moving average crossing at 138.187 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 136.602. Second resistance is the 20-day moving average crossing at 138.187. First support is the overnight low crossing at 134.420. Second support is the 75% retracement level of the 2008-2009-rally crossing at 130.867.
PRECIOUS METALS
April gold was lower due to profit taking triggered by a strong U.S. Dollarovernight as it consolidates some of the rally off this month’s low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that additional strength is still possible. If April extends this month’s rally, the reaction high crossing at 1142.90 is the next upside target. Closes below the 10-day moving average crossing at 1092.70 wouldconfirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at 1128.70. Second resistance is the reaction high crossingat 1142.90. First support is the 20-day moving average crossing at 1093.30. Second support is the 10-day moving average crossing at 1092.70.
GRAINS
March corn was lower overnight as it extends this week’s decline. The mid-range close overnight sets the stage for a steady to lower opening when the day session begins. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. If March resumes this winter’s decline, the 75% retracement level of the September-January rally crossing at 3.42 3/4 is the next downside target. Closes above Tuesday’s high crossing at 3.68 3/4 are needed to confirm that a short-term low has been posted. First resistance is the reaction high crossing at 3.68 1/4. Second resistance is Tuesday’s high crossing at 3.68 3/4. First support is the overnight low crossing at 3.53 1/4. Second support is this month’s low crossing at 3.47 1/2.
March wheat gapped down and was lower overnight as it extends the decline off Tuesday’s high. The high-range close sets the stage for a steady to lower opening when the day session begins trading later this morning. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. If March extends this week’s decline, this month’s low crossing at 4.66 1/2 is the next downside target. Closes above uesday’s high crossing at 5.09 are needed to renew the rally off this month’s low. First resistance is the 10-day moving average crossing at 4.88. Second resistance is Tuesday’s high crossing at 5.09. First support is the overnight low crossing at 4.77 1/2. Second support is this month’s low crossing at 4.66 1/2.
March soybeans were lower overnight as it extends this week’s decline off Tuesday’s high. The high-range overnight close sets the stage for a steady to lower opening when the day session begins later this morning. Stochastics and the RSI are overbought and are turning bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 9.33 1/2 would temper the near-term friendly outlook in the market. If March renews this month’s rally, the 38% retracement level of the December-February decline crossing at 9.70 1/4 is the next upside target. First resistance is Tuesday’s high crossing at 9.66. Second resistance is the 38% retracement level of the December-February decline crossing at 9.70 1/4. First support is the 20-day moving average crossing at 9.33 1/2. Second support is the reaction low crossing at 9.18 3/4.
