Tuesday, March 5–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Overnight China announced a new spending/stimulus initiative to keep its economy on an upward glide. China officials are expecting their GDP to be at 7.5% growth in 2013. This news is a bullish factor for the raw commodity sector and for world stock markets. There was more weak economic data coming out of the European Union Tuesday. The Markit firm said its composite purchasing managers’ index for the Euro zone declined to 47.9 in February from 48.6 in January. Any reading below 50.0 indicates contraction. Many expected the Market PMI to come in worse than it did. Also, the PMI report was somewhat offset by news that the German purchasing managers index rose to 54.7 in February from 54.1 in an earlier estimate. There is a meeting of European Union leaders in Brussels early this week to address their sovereign debt crisis and other economic matters. Discussions will likely include Italy, following last week’s elections that showed the country is wavering on its pervious austerity commitments. So far, no major pronouncements have come from that meeting. Arguably the most important U.S. economic report of the month, the employment situation report, is due out Friday morning. The European central bank also holds its monthly meeting and press conference on Thursday. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the IBD/TIPP economic optimism index, the ISM non-manufacturing report on business, and the global services PMI.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early yesterday and hit a fresh five-year high overnight. The bulls have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early yesterday. Yesterday, shorter-term technical resistance comes in at 1,540.00 and then at 1,550.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at 1,515.00 and then at 1,500.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
Nasdaq index futures: Prices are firmer in early trading. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early yesterday. Shorter-term technical resistance is located at the February high of 2,786.50 and then at 2,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,761.00 and then at 2,750.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
Dow futures: Prices are higher early yesterday and hit a fresh five-year high overnight. The bulls have the overall near- term technical advantage. Sell stops likely reside just below technical support at 14,100 and then at 14,050. Buy stops likely reside just above technical resistance at 14,200 and then at 14,250. Shorter-term moving averages are bullish early yesterday, 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 bullish early yesterday. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower early yesterday. Bulls are fading and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are still bullish early yesterday. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early yesterday. Shorter-term resistance lies at 144 even and then at 144 13/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 143 15/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 June U.S. T-Notes: Prices are weaker early yesterday. Bulls still have the slight near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early yesterday. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early yesterday. Shorter-term resistance lies at the overnight high of 131.23.0 and then at 131.27.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.14.5 and then at 131.11.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The U.S. dollar index is weaker early yesterday on profit taking. The greenback bulls still have the solid near-term technical advantage. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at 82.500 and then at last week’s high of 82.795. Shorter-term support is seen at the overnight low of 82.165 and then at 82.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are slightly higher early yesterday. Prices are hovering near a nine-week low. Bears still have downside technical momentum. In April Nymex crude, look for buy stops to reside just above resistance at the overnight high of $90.70 and then at $91.00. Look for sell stops just below technical support at $90.00 and then at $89.50. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were narrowly mixed overnight. The key “outside markets” are in a modestly bullish posture for the grains yesterday, as the U.S. dollar index is weaker and crude oil prices are slightly higher. There have been better moisturepatterns in the central U.S. that are working to alleviate the severe soil shortages in the region and that’s and underlying bearish factor for the grain markets. Traders are awaiting Friday morning’s USDA supply and demand report.
