Friday, July 19–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

It’s a quieter Friday in the world market place, as there were no major economic reports or fresh geopolitical developments overnight. Many traders and investors in Europe and North America are gearing up for their summer holidays, which could made for generally quieter, summer doldrums-type trading conditions until after the U.S. Labor Day holiday in early September. The market place is still digesting this week’s testimony be Fed Chairman Ben Bernanke before the U.S. Congress. Most believe the Fed chief came down on the dovish side of U.S. monetary policy, which is not surprising. However, Bernanke really said nothing radically different than what he’s already said in his recent speeches. It can be argued the market place took this week’s Bernanke comments as indicating the Fed will keep its quantitative easing in place at least a little longer that what it thought just a few weeks ago. There is no major U.S. economic data due for release Friday.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early today after hitting a record high on Thursday. Bulls 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 and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Thursday’s record high of 1,688.30 and then at 1,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s 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: 5.5

Nasdaq index futures: Prices are slightly lower early today after hitting a 12-year high Thursday and then selling off sharply late. If prices today closed with decent losses then a bearish “key reversal” down would be confirmed on the daily bar chart, which would be one early technical clue this market has put in a top. But right now the bulls have the 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 and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at 3,053.50 and then at 3,065.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,038.75 and then at 3,025.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

Dow futures: Prices are slightly lower early today on profit taking after hitting a record high on Thursday. Bulls have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at the all-time high of 15,530 and then at 15,600. Sell stops likely reside just below technical support at 15,450 and then at 15,400. 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 early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are slightly higher early today on more short covering. Bears still 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 and 18-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 135 3/32 and then at 135 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 20/32 and then at 134 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are firmer early today. Bears have the overall near-term technical advantage, but the bulls have gained some momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 127.01.0 and then at this week’s high of 127.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.24.0 and then at Thursday’s low of 126.19.5 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The September U.S. dollar index is lower in early U.S. trading. Bulls have faded. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.060 and then at Thursday’s high of 83.160. Shorter-term support is seen at the overnight low of 82.630 and then at this week’s low of 82.525. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are higher early today and hit a fresh 14-month high of $108.65 overnight. Bulls still have upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at $109.00 and then at $110.00. Look for sell stops just below technical support at the overnight low of $107.73 and then at $107.00. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed but mostly firmer in overnight trading. Weather forecasts for the U.S. Corn Belt remain the dominant market factor in the grains. The latest weather forecasts are calling for better chances for rainfall and cooler temps over the weekend and early next week. However, recent Corn Belt weather forecasts have seen a trend of actual rainfall amounts not meeting forecast expectations. If this trend continues, which is more likely than not, then a significant weather market rally is likely. Trading in the grain futures Sunday evening and next Monday could be the most volatile of the year, given the unpredictability of what the Corn Belt weather patterns will suggest come early next week. Corn is at its critical pollination period in much of the Corn Belt.