Friday, March 1–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The U.S. government’s inability to agree on a taxing and spending plan by the Friday, March 1, sequestration deadline is being given credit for a “risk-off” day in the market place early Friday. However, with the weaker stock indexes Friday morning the culprit is more likely just profit taking from recent strong gains. President Obama will meet with congressional leaders Friday on the budget matters. The market place also got a mildly bearish read on fresh manufacturing data coming out of China Friday. The official purchasing managers’ index fell to 50.1 in February from 50.4 in January. A reading of 50.5 was expected. The European Union and its sovereign debt problems have surfaced again this week. The Italian elections a few days ago failed to show a clear winner, creating uncertainty regarding present government austerity measures. On Friday it was reported the overall European Union had record unemployment in January, at a collective 11.9%. It was also reported that annual inflation in the EU fell to its lowest level in over two years. Fresh US manufacturing data Friday was also downbeat. That news helped to sink the Euro currency against the U.S. dollar on Friday. However, the latest episode in the EU debt crisis appears to be calming down just a bit at late-week. U.S. economic data due for release Friday includes personal income and outlays, the U.S. manufacturing PMI, the University of Michigan consumer sentiment survey, construction spending, the ISM manufacturing report on business, the global manufacturing PMI, and domestic auto industry sales.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are lower early yesterday on some profit taking. The bulls still have the overall near-term technical advantage. Trading has turned volatile at higher price levels recently, which is not bullish. The shorter-term moving averages (4-, 9- and 18-day) are still bearish early yesterday. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Yesterday, shorter-term technical resistance comes in at this week’s high of 1,524.30 and then at the February high of 1,530.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at 1,500.00 and then at 1,490.20. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker in early trading on some profit taking. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are still bearish early yesterday. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Shorter-term technical resistance is located at the overnight high of 2,741.50 and then at 2,750.00. Buy stops likely reside just above those levels. On the downside, short-term supportis seen at 2,704.75 and then at this week’s low of 2,688.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
Dow futures: Prices are lower yesterday. The bulls still have the overall near-term technical advantage. However, the higher volatility at higher price levels is a bearish clue of a topping process. Sell stops likely reside just below technical support at 13,950 and then at 13,900. Buy stops likely reside just above technical resistance at 14,000 and then at 14,050. Shorter-term moving averages are neutral early yesterday, 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 early yesterday. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are higher early yesterday and hovering not far below this week’s five-week high. Bulls have the overall 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 early yesterday. Shorter-term resistance lies at this week’s high of 144 26/32 and then at the January high of 144 30/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 144 even and then at the overnight low of 143 29/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
June U.S. T-Notes: Prices are higher early yesterday and hovering near a two-month high. Bulls have the 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 bullish early yesterday. Shorter-term resistance lies at this week’s high of 131.27.0 and then at 132.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.18.0 and then at 131.11.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The U.S. dollar index higher early yesterday and hit another fresh six-month high overnight. The greenback bulls have the solid near-term technical advantage. Slow stochastics for the dollar index are neutral early yesterday. The dollar index finds shorter-term technical resistance at 82.500 and then at 82.750. Shorter-term support is seen at 82.000 and thenat the overnight low of 81.850. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Crude oil prices are lower early yesterday and hit a fresh two-month low overnight. Bears have downside technical momentum. In April Nymex crude, look for buy stops to reside just above resistance at $91.00 and then at $92.00. Look for sell stops just below technical support at $90.00 and then at $89.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were lower overnight amid the “risk-off” trader mentality in the market place. The key “outside markets are also bearish yesterday as the U.S. dollar index is higher and crude oil prices are lower. There have also been better moisture patterns in the central U.S. that are working to alleviate the severe soil shortages in the region and that’s bearish for the grain markets. I have turned more bearish the grains just recently.
