Wednesday, July 17–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The world market place is on hold ahead of Wednesday morning’s appearance by Federal Reserve Chairman Ben Bernanke before the U.S. House of Representatives, where he will report on U.S. monetary policy and the economy. Traders are looking for the Fed chief to offer fresh clues on when the Fed will start to back off on its monthly bond-buying program (quantitative easing). Many are still thinking the Fed will do such later this year and as soon as September. However, Bernanke in remarks last week hinted he wants QE to start to wind down later rather than sooner because he feels the U.S. economic recovery is still shaky. Bernanke and the Fed have been significant markets-movers in recent months. European stocks were modestly lower Wednesday, on ideas Bernanke’s remarks Wednesday will not be bullish for equities. Asian stocks were mixed in subdued trading Wednesday, ahead of the Bernanke testimony to U.S. lawmakers. Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly lower early today on profit taking after closing at an all-time record high close on Monday. 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 bearish early today. Today, shorter-term technical resistance comes in this week’s high of 1,679.40 and then at the all-time high 1,685.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,666.00 and then at 1,657.80. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are slightly lower early today after hitting a 12-year high Tuesday. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is located at Tuesday’s high of 3,080.25 and then at 3,090.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,062.75 and then at 3,049.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
Dow futures: Prices are slightly lower early today on mild profit taking. Buy stops likely reside just above technical resistance at 15,400 and then at 15,450. Sell stops likely reside just below technical support at Tuesday’s low of 15,355 and then at 15,300. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are weaker early today. Bears have the overall near-term technical advantage. Prices are in a 10-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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 135 10/32 and then at 135 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 134 17/32 and then at 134 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are weaker early today. Bears have the overall 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 and 18-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 last week’s high of 126.25.0 and then at the July high of 127.02.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.08.0 and then at 126.00.0 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 higher in early U.S. trading as bulls have faded. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.910 and then at Tuesday’s high of 83.270. Shorter-term support is seen at this week’s low of 82.525 and then at 82.250. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are slightly lower early today. Bulls still have upside near-term technical momentum as prices hover near a 14-month high. In August Nymex crude, look for buy stops to reside just above resistance at $106.00 and then at $107.00. Look for sell stops just below technical support at the overnight low of $105.11 and then at this week’s low of $104.65. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were narrowly mixed but mostly weaker in overnight trading. Weather forecasts for the U.S. Corn Belt remain the dominant market factor in the grains. Updated forecasts Wednesday will drive the grain markets. If rainfall and rainfall chances remain only spotty in the coming days, the weather concerns will once again quickly build in the corn and soybean markets. Corn is now at its critical pollination period in much of the Corn Belt. Grain markets could also be impacted by today’s Bernanke testimony to U.S. lawmakers, if other key “outside markets” are also impacted significantly.
