Monday, July 22–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
It’s a “risk-on” trading day in the market place early Monday, as the U.S. dollar index is under selling pressure while crude oil and gold prices are posting gains. It appears U.S. Federal Reserve Chairman Ben Bernanke has made progress in convincing the market place that its monetary policy will remain very accommodative for some time to come. The commodity markets are also seeing some buying support coming from last Friday’s move by China’s central bank to lower the interest rate floor on China’s banks’ lending rates. Just a few weeks ago a liquidity crunch in China’s banking system spooked the world market place. European stocks were mostly weaker in subdued summertime trading Monday, while Asian stock markets were mostly firmer. U.S. economic data due for release Monday includes the Chicago Fed national activity index and existing home sales.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly higher early today and hit another record high overnight. 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 1,700.00 and then at 1,710.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 1,675.40 and then at last week’s low of 1,666.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are slightly higher early today. Price action late last week produced a bearish “key reversal” down on the daily bar chart, which is one early technical clue this market has put in a top. But the bulls still 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 neutral to bearish early today. Shorter-term technical resistance is located at the overnight high of 3,052.25 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 3,040.25 and then at last week’s low of 3,030.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly higher early today and hovering near last week’s record high. 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 Friday’s low of 15,440 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: 5.5
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are higher early today and hit a fresh three-week high on more 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 and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 135 31/32 and then at 136 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 18/32 and then at 135 even. 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 still 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 bullish early today. Shorter-term resistance lies at the overnight high of 127.10.0 and then at 127.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 127.02.5 and then at Friday’s low of 126.22.5 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 and hit a four-week low in early U.S. trading. Bulls have faded badly. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.50 and then at the overnight high of 82.740. Shorter-term support is seen at the overnight low of 82.365 and then at 82.000. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are higher early today and hovering near a 14-month high. Nymex WTI prices pushed above Brent crude prices for the first time in a long time. Bulls have upside near-term technical momentum. In September Nymex crude, look for buy stops to reside just above resistance at last week’s high of $108.93 and then at $109.00. Look for sell stops just below technical support at the overnight low of $107.88 and then at $106.91. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Markets were mixed but mostly firmer in overnight trading. The U.S. Corn Belt received only spotty rains during the weekend, but more rain chances are in the forecast for this week, along with cooler temperatures. Traders are giving the present weather patterns and the forecast for the Corn Belt a slightly bearish read. Still, recent Corn Belt weather forecasts have seen a trend of actual rainfall amounts not meeting forecast expectations. Corn is now in its critical pollination period in much of the Corn Belt. The key “outside markets” have turned to a bullish posture for the grains, as the U.S. dollar index has weakened and crude oil prices are trending higher.
