Friday, August 9–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
There was more upbeat Chinese economic data released overnight. China industrial production rose in by 9.7% in July, year-on-year while inflation data remained tame, as the July consumer price index was up 2.7% year-on-year. This data Friday follows the strong China data Thursday that showed China exports were up a much higher than expected 5.1% year-on-year in July, compared to a 3.1% drop in June. Chinese imports rose by a much higher than expected 11%, year-on-year, it was reported Thursday. The recent batch of stronger-than-expected Chinese economic data is a bullish underlying factor for the raw commodity sector, especially the base metals markets. U.S. economic data due for release Friday is light and includes the monthly wholesale trade report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early today on profit taking. Bulls still have the solid 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 below the 9-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 at the overnight high of 1,695.20 and then at the record high of 1,705.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,680.80 and then at 1,670.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker early today on profit taking. 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 to bearish early today. Shorter-term technical resistance is located at the overnight high of 3,131.75 and then at this week’s high of 3,140.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,118.00 and then at Thursday’s low of 3,108.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early today on profit taking. Bulls still have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at 15,453 and then at Thursday’s high of 15,515. Sell stops likely reside just below technical support at Thursday’s low of 15,375 and then at 15,350. Shorter-term moving averages are neutral early today, as the 4-day moving average is below 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: 4.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly higher early today on more tepid short covering. Bears still 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 134 20/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 2/32 and then at Thursday’s low of 133 24/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are steady early today as more short covering is featured. Bears still 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. 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 this week’s high of 126.29.0 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.20.5 and then at 126.16.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.135 and then at 81.250. Shorter-term support is seen at the overnight low of 80.970 and then at this week’s low of 80.895. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are firmer early today, on short covering. Bulls have the overall near-term technical advantage, but have faded this week. A bearish double-top reversal pattern has formed on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at the overnight high of $104.82 and then at $105.00. Look for sell stops just below technical support at $103.50 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mixed but mostly firmer in overnight trading, on more short covering. There may be some heavier short covering and position evening during the day session Friday, and on Monday morning, ahead of the midday-Monday release of the monthly USDA supply and demand report, at which time the government will update its estimate of the size of the U.S. corn and soybean crop this year. Most traders reckon the USDA data on Monday will favor the bearish camp. However, it’s still my bias that there is not strong downside price pressure left in the grain markets, after their recent beating.
