Tuesday, September 10–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Notions are receding that the U.S. will attack the Syrian regime over its alleged use of chemical weapons. Russia has put forth a plan to put Syria’s chemical weapons under international control. President Obama said the plan could avoid a U.S. strike on Syria. U.S. citizens are also becoming less and less in favor of a U.S. military operation against Syria’s regime. This development has increased investor risk appetite in the market place—to the detriment of safe-haven assets like gold and U.S. Treasuries. On the economic front, China’s industrial output rose by 10.4% on an annual basis in August, which beat market expectations of a 9.9% gain. China’s retail sales also beat forecasts and were up 13.4% in August, year on year. This adds to a string of generally upbeat economic data coming out of China and Asia. Such is an underlying bullish factor for the raw commodity sector. Reports Tuesday said gold imports to India fell by more than 90% during August, year on year, due to government-imposed import taxes. Traders and investors are looking ahead to next week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). A slight majority of the market place believes the U.S. central bank at next week’s meeting will announce it will begin to scale back, or “taper” its monthly bond-buying program. For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of next week’s FOMC meeting. U.S. economic data due for release Tuesday includes the Manpower quarterly U.S. employment outlook survey, the NFIB small business index, and the Johnson Redbook and Goldman Sachs weekly retail sales reports.–Jim U.S.
STOCK INDEXES
S&P 500 futures: Prices are higher early today and have hit a fresh three-week high. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at 1,685.00 and then at the all-time high of 1,705.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,669.20 and then at this week’s low of 1,654.90. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index futures: Prices are higher early today and hit a fresh 12-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 today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at 3,185.00 and then at 3,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,167.25 and then at 3,150.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5.
Dow futures: Prices are higher early today and hit a fresh three-week high overnight. Bulls have gained good upside momentum recently. Buy stops likely reside just above technical resistance at 15,150 and then at 15,200. Sell stops likely reside just below technical support at 15,085 and then at 15,000. Shorter-term moving averages are neutral early today, as the 4-day moving average is above 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: 6.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower early today and hovering near the recent contract low. Bears have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 130 25/32 and then at 131 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 129 25/32 and then at 129 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 September U.S. T-Notes: Prices are lower early today and hovering near the recent contract low. Bears have the strong overall 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 neutral early today. Shorter-term resistance lies at 123.00.0 and then at the overnight high of 123.07.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 122.24.0 and then at 122.16.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher early today. Bulls and bears are on an overall level near-term technical playing field as the bulls have faded just recently. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.260 and then at 82.500. Shorter-term support is seen at Monday’s low of 81.905 and then at 81.750. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
October Nymex crude oil prices are sharply lower early today, on a corrective pullback from recent gains and on lessening odds of a U.S. military attack on Syria’s regime.Crude oil bulls still have the overall near-term technical advantage. In October Nymex crude, look for buy stops to reside just above resistance at $108.00 and then at $109.00. Look for sell stops just below technical support at $107.00 and then at $106.00. Wyckoff’s Intra-Day Market Rating: 3.5
GRAINS
Markets were mostly weaker overnight. Soybean bulls are maintaining their technical advantage. Corn and wheat bears remain in firm technical command. While the weather forecasts for the U.S. Corn Belt call for very warm and dry conditions in the region in the next couple days, it appears the late-summer weather market has played out in the grain futures markets. It appears yield damage to the crops has already been mostly factored into present prices. For grain market prices to gain more upside in the near term, some new fundamental news will have to occur. Focus is on Thursday morning’s USDA monthly supply and demand report, at which time updated corn and soybean production forecasts will be given by USDA.
