Friday, January 18–Jim Wyckoff’s Morning Web Log
Note: I am out of the office this morning. My friend and fellow analyst/trader Ken Seehusen produced most of my morning report. Ken’s style is a bit different than mine, but I think you’ll also benefit from Ken’s work.–Jim
The market place was again generally quiet in overnight trading. China’s fourth-quarter gross domestic product was reported Friday at an annual growth rate of 7.9%. Industrial production in China was also up 10%, year on year. The figure was slightly stronger than expected and suggests China’s economy will grow at around an 8% annual rate in 2013. The China news is a bullish underlying factor for the raw commodity sector, due to the demand implications. In the U.S. focus is presently on corporate earnings reports being released. On the back burner is the still-unresolved major issue of a permanent agreement by U.S. lawmakers on government taxing and spending measures. It’s likely this situation will heat up in the coming weeks, and such would significantly impact the market place. U.S. economic data due for release Friday is light and includes the University of Michigan consumer sentiment survey.–Jim
The STOCK INDEXES
The March NASDAQ 100 was lower overnight as it consolidates some of Thursday ‘s rally. Stochastics are overbought but are neutral to bullish signaling that sideways to higher prices are still possible near-term. If March extends the rally off the late-December low, the 75% retracement level of the September-November decline crossing at crossing at 2761.06 is the next upside target. Closes below the 20-day moving average crossing at 2697.43 are needed to confirm that a short-term top has been posted. First resistance is the 75% retracement level of the September-November decline crossing at crossing at 2761.06. Second resistance is the 87% retracement level of the September-November decline crossing at 2804.15. First support is the 20-day moving average crossing at 2697.43. Second support is the January 2nd gap crossing at 2665.00.
The March S&P 500 index was slightly higher overnight as it extends the rally off November’s low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off November’s low, weekly resistance crossing at 1526.50 is the next upside target. Closes below the 20-day moving average crossing at 1446.38 would confirm that a short-term top has been posted. First resistance is Thursday’s high crossing at 1480.30. Second resistance is weekly resistance crossing at 1526.50. First support is the 10-day moving average crossing at 1464.47. Second support is the 20-day moving average crossing at 1446.38.
March T-bonds was higher overnight as it consolidated some of Thursday’s decline. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average crossing at 146-02 are needed to confirm that a short-term low has been posted. If March renews the decline off December’s high, September’s low crossing at 143-08 is the next downside target. First resistance is the 20-day moving average crossing at 146-02. Second resistance is the January 2nd gap crossing at 146-23. First support is the reaction low crossing at 143-17. Second support is September’s low crossing at 143-08.
ENERGY MARKETS
February crude oil was slightly lower overnight as it consolidated some of Thursday’s rally. Stochastics and the RSI are overbought and remain neutral to bullish signaling that sideways to higher prices are possible near-term. If February extends the rally off December’s low, the 75% retracement level of the September-November decline crossing at 97.46 is the next upside target. Closes below the 20-day moving average crossing at 92.52 are needed to confirm that a short-term top has been posted. First resistance is Thursday’s high crossing at 96.04. Second resistance is the 75% retracement level of the September-November decline crossing at 97.46. First support is the 10-day moving average crossing at 93.94. Second support is the 20-day moving average crossing at 92.52.
CURRENCIES
The March Dollar was higher overnight as it extends this week’s trading range below the 20-day moving average crossing at 79.91. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If March renews this month’s decline, December’s low crossing at 79.01 is the next downside target. Closes above the 10-day moving average crossing at 79.97 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 79.97. Second resistance is December’s high crossing at 81.05. First support is Monday’s low crossing at 79.40. Second support is December’s low crossing at 79.01.
GRAINS
March corn was higher overnight as it consolidates some of Thursday’s decline but remains below the August-November downtrend line crossing near 7.32. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to
higher prices are possible near-term. Multiple closes above the aforementioned downtrend line would confirm a trend change while opening the door for a possible test of the 38% retracement level of the August-January decline crossing at 7.42. Closes below the 20-day moving average crossing at 7.02 3/4 would confirm that a short-term top has been posted. First resistance is the August-November downtrend line crossing near 7.32. Second resistance is the 38% retracement level of the August-January decline crossing at 7.42. First support is the 10-day moving average crossing at 7.11 1/2. Second support is the 20-day moving average crossing at 7.02 3/4.
March wheat was higher overnight as it extends the trading range of the past three days. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If March renews the rally off last Friday’s low, the 38% retracement level of the November-January decline crossing at 8.10 1/2 is the next upside target. Closes below the 10-day moving average crossing at 7.64 3/4 would confirm that a short-term top has been posted. First resistance is the 38% retracement level of the November-January decline crossing at 8.10 1/2. Second resistance is the 50% retracement level of the November-January decline crossing at 8.33 1/4. First support is the 10-day moving average crossing at 7.64 3/4. Second support is last Friday’s low crossing at 7.36 1/4.
March soybeans were higher overnight and are poised to extend the rally off last Friday’s low. The mid-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off last Friday’s low, the 38% retracement level of the September-January decline crossing at 14.95 1/4 is the next upside target. Closes below the 10-day moving average crossing at 14.04 1/2 would temper the near-term friendly outlook. First resistance is the 25% retracement level of the September-January decline crossing at 14.45 1/2. Second resistance is the 38% retracement level of the September-January decline crossing at 14.95 1/4. First support the 10-day moving average crossing at 14.04 1/2. Second support is last Friday’s low crossing at 13.51 1/2.
