OVERNIGHT/EARLY MORNING DEVELOPMENTS
The feature overnight was that markets were relatively quiet across the board. Crude oil prices are steady, bonds and notes are firmer and the U.S. stock indexes are weaker in early electronic trading. The U.S. dollar is weaker versus the major currencies in very early U.S. trading. Grains were mostly higher in overnight electronic trading. There was no fresh, major market-moving news overnight.
U.S. ECONOMIC REPORTS/EVENTS
On tap today is the MBA refinancing index and the weekly DOE energy stocks report. It’s another fairly light report day in the U.S.
U.S. STOCK INDEXES
The indexes are weaker in early morning electronic trading. The bulls are fading again. However, my bias is that trading will be choppy in the near term, amid summertime doldrums in the stock market.
September S&P 500: The shorter-term moving averages (4-, 9- and 18-day) are back to being fully bearish. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Today, key shorter-term technical support comes in 1,247.30–this week’s low. Heavier sell stops likely reside just under that level. More sell stops likely reside under shorter-term support at 1,242.00. Shorter-term upside resistance for active traders today is at Tuesday’s high of 1,259.80. Buy stops are likely located just above that price level, and then just above shorter-term resistance at 1,265.00.
September Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are now turning bearish. The 4-day is above the 9-day moving average, but may cross below it today. The 9-day moving average is still below the 18-day. Today, shorter-term technical support is located at this week’s low of 1,560.00. Heavier sell stops likely reside just below that level, and then below support at 1,555.00. On the upside, short-term resistance is seen at this week’s high of 1,586.00. Buy stops are likely located just above that level. Heavier buy stops are likely located just above last week’s high of 1,603.00.
September Dow: Bulls need to step up soon. For today, sell stops likely reside just below support at this week’s low of 10,985 and then just below support at 10,917. Buy stops likely reside just above shorter-term technical resistance at this week’s high of 11,135 and then just above resistance at 11,200. Shorter-term moving averages are turning bullish, as the 4-day moving average is above the 9-day, and poised to move above the 18-day today. But the 9-day is still below the 18-day moving average.
U.S. TREASURY BONDS AND NOTES
Both notes and bond prices were modestly higher in overnight trading in Chicago, on some short covering from recent declines. Bears still have the near-term technical momentum on their side.
September U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are turning bearish. The 4-day moving average is below the 9-day average and the 18-day. The 9-day is above the 18-day, but is turning back south and poised to cross below the 18-day as soon as today. Slow stochastics do show the market being oversold and due for a corrective bounce very soon. Shorter-term resistance lies at 106 25/32–Tuesday’s high–and then at 107 even. Buy stops likely lie just above those levels. Shorter-term technical support lies at Tuesday’s low of 106 6/32 and then at 106 even. Sell stops likely reside just below those levels.
September U.S. T-Notes: Prices are firmer in early morning dealings. Slow stochastics show the market as being short-term oversold and due for a rebound very soon. Buy stops likely reside just above shorter-term resistance at 105.00.0, and then just above resistance at 105.07.0. Shorter-term moving averages are fully bearish. The 4-day moving average is below the 9-day and 18-day average. The 9-day is below the 18-day moving average. A move in prices below shorter-term support at Tuesday’s low of 104.17.5 would likely uncover heavier sell stops. More heavy sell stop orders are likely located just below strong support at the May low of 104.13.0.