Wednesday, September 11–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The likelihood of a U.S. military attack on the Syrian regime continues to decrease this week, which has boosted investor risk appetite worldwide. That’s bullish for world stock markets and most other markets—but bearish for safe-haven assets such as gold, U.S. Treasuries and German bonds. President Obama said in a speech to U.S. citizens Tuesday night that he has asked the Congress to postpone a vote on using military force against Syria, and said he has asked Secretary of State Kerry to meet with Russian officials, regarding the Russian overture to put Syria’s chemical weapons under international control. U.S. polls are showing U.S. citizens are becoming less and less in favor of a U.S. military operation against Syria’s regime. However, in the volatile Middle East there always seems to be trouble brewing—if not one place then another. The market place is again watching Egypt. In the Sinai Peninsula, three Egyptian soldiers were killed in two bomb explosions Wednesday. That news gave crude oil prices a brief, modest boost overnight. On the economic front, in another sign of rising world interest rates, German 10-year bond yields on Wednesday rose above 2.0% for the first time in nearly two years. A new bond auction saw the German 10-year yield hit 2.06%. The next important piece of U.S. economic news on the docket this week will be Thursday morning’s weekly jobless claims report. Many 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 Wednesday includes the weekly mortgage applications survey, monthly wholesale trade, and the weekly DOE liquid energy stocks report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today and poked to another three-week high overnight. Bulls have the overall near-term technical advantage and have upside momentum on their side. 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,684.00 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 Wednesday’s 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: 5.0
Nasdaq index futures: Prices are weaker early today on some mild profit taking after hitting a 12-year high Tuesday. The bulls still 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 neutral early today. Shorter-term technical resistance is located at Tuesday’s high of 3,189.25 and then at 3,200.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s 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: 4.5
Dow futures: Prices are slightly 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 15,200 and then at 15,250. Sell stops likely reside just below technical support at Tuesday’s low of 15,125 and then at 15,085. 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: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are firmer early today on short covering in a bear market. Bears still have the solid 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Tuesday’s high of 130 27/32 and then at 131 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 3/32 and then at the contract low of 129 25/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
September U.S. T-Notes: Prices are firmer early today on short covering in a bear market. Bears still 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 to bullish early today. Shorter-term resistance lies at Tuesday’s high of 123.07.5 and then at this week’s high of 123.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.22.5 and then at 122.16.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The September U.S. dollar index is near steady 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 Tuesday’s high of 82.185 and then at 82.260. Shorter-term support is seen at this week’s low of 81.905 and then at 81.750. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
October Nymex crude oil prices are slightly weaker early today, on a corrective pullback and profit taking 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 the overnight high of $108.00 and then at $109.00. Look for sell stops just below technical support at this week’s low of $106.39 and then at $106.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were slightly higher overnight on chart consolidation, short covering and position evening. Soybean bulls have the near-term technical advantage. Corn and wheat bears remain in firm technical command. Weather forecasts for the U.S. Corn Belt are now becoming less of market factor by the day. Yield damage to the corn and soybean crops by the late-summer drought has already been mostly factored into grain futures 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.
