Thursday, August 8–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Chinese economic data released overnight was bullish for most of the market place and especially for the raw commodity sector. China exports were up a much higher than expected 5.1% year-on-year in July, compared to a 3.1% drop in June. Chinese imports rose by a much higher than expected 11%, year-on-year. The European Central Bank released a forecast Thursday that shows it expects Euro zone economic growth to contract by 0.6% in 2013, citing weak consumer demand worldwide. The ECB forecast Euro zone growth in 2014 at up 0.9%. The ECB report comes out at a time when recent Euro zone economic data has shown generally slight improvement. U.S. economic data due for release Thursday includes the weekly jobless claims report and the ICSC chain store trends report.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today. 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. 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 the record high of 1,705.00 and then at 1,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,688.30 and then at this week’s low of 1,680.80. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today. The 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at this week’s high of 3,140.25 and then at 3,150.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,116.00 and then at 3,100.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are higher early today. Bulls have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at this week’s high of 15,573 and then at the record high of 15,600. Sell stops likely reside just below technical support at 15,444 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5

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 solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-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 134 15/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 27/32 and then at 133 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are slightly higher early today 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. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 126.29.0 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.16.0 and then at this week’s low of 126.06.0 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 and hit another fresh six-week low overnight. Bears have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.395 and then at 81.500. Shorter-term support is seen at the overnight low of 81.115 and then at 81.000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are near steady early today. Bulls have the overall near-term technical advantage, but have faded this week. If prices back off the rest of this week then a bearish double-top reversal pattern would form on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at $105.00 and then at $105.50. Look for sell stops just below technical support at $104.00 and then at $103.50. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were firmer in overnight trading, on short covering in bear markets. The grain market bears remain in solid technical command. However, it’s now my bias that there is not strong downside price pressure left in the grain markets, after their recent beating. The next major data points for the grain markets are likely to be the monthly USDA supply and demand report, out next Monday, and the Pro Farmer Midwest crop tour in late-August.