Tuesday, June 18–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Asian and European stock markets were mixed in quieter dealings overnight as the market place anxiously awaits the results of the two-day meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC) that begins Tuesday morning and concludes Wednesday afternoon. Fed Chairman Ben Bernanke will also hold a press conference following the FOMC meeting. Traders and investors will be looking for fresh information from the Fed on if, when and by what degree it will start to wind down its quantitative easing programs that have been in place for several years. The keener uncertainty ahead of this particular FOMC meeting arises from the wide range of expert opinions on just what path the U.S. central bank will take in its monetary policy. It appears the slight majority of market watchers believe the Fed will stand pat for the time being on its monetary policy. However, recent slightly better U.S. economic data has led to ideas the Fed will soon begin to lay the groundwork for its eventual exit from quantitative easing of monetary policy. In other news, the Euro currency got some support Tuesday from a better-than-expected German ZEW consumer confidence survey for June. The survey also saw respondents reckon that German economic activity would pick up as the year progresses. The Japanese stock market was slightly lower in quieter trading Tuesday. The world is keeping a closer eye on Japan’s Nikkei stock index, thinking it could be a leading indicator of what is to come for the other major world stock markets. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, real earnings, the consumer price index, and new residential construction.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above 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 Monday’s high of 1,640.70 and then at last week’s high of 1,648.30. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,632.50 and then at Monday’s low of 1,618.80. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are firmer early today. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are still 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 bullish early today. Shorter-term technical resistance is located at the overnight high of 2,976.50 and then at Monday’s high of 2,985.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,965.75 and then at 2,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly higher early today. Buy stops likely reside just above technical resistance at Monday’s high of 15,185 and then at 15,200. Sell stops likely reside just below technical support at 15,121 and then at 15,100. 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 early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are lower early today. Bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 139 22/32 and then at 140 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 139 even and then at 138 19/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are lower early today. Bears have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 the overnight high of 129.10.0 and then at Monday’s high of 129.24.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 129.00.0 and then at 128.19.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly lower in early U.S. trading and hovering near a four-month low. 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 Monday’s high of 81.065 and then at 81.205. Shorter-term support is seen at Monday’s low of 80.705 and then at 80.500. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are slightly lower early today on some consolidation after hitting a four-month high on Monday. Bulls still have some upside momentum and have the overall near-term technical advantage. In July Nymex crude, look for buy stops to reside just above resistance at $98.00 and then at Monday’s high of $98.74. Look for sell stops just below technical support at $97.00 and then at $96.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mostly firmer in overnight trading. The USDA’s weekly crop progress reports showed the U.S. corn crop is behind normal in development, with many unplanted fields, which is supportive for that market. Soybean bulls still have the slight overall near-term technical advantage, but are now fading. Corn and wheat bears have the near-term technical edge. The “seasonality” of the grain markets shows that a critical timeframe is approaching—the first week in July. That is a period of time where price trends in the grain can reverse, or existing price trends can accelerate. July will be a very important month for determining the direction of grain futures market prices for the next several months. As veteran grain market watcher Conrad Leslie once told me, “In July, eyes turn to the sky,” watching weather patterns in the U.S. Corn Belt for this important growing month for corn and soybeans.
