Monday, September 9–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

European stocks were weaker Monday on jitters regarding a potential U.S. military strike against the Syrian regime. The G-20 meeting in Russia ended over the weekend. The main focus was President Obama’s efforts to line up support for U.S. military action against the Syrian regime. His efforts had mixed results at best. Obama will make a televised speech on the matter Tuesday. The U.S. Congress this week will also debate and likely vote on the issue. The market place is still jittery regarding a potential U.S. military strike against Syria, mainly due to the reaction of other countries, such as Russia, China and Iran, should the U.S. take action. China during the weekend reported strong exports during August, at up 7.2% on an annualized basis. Strong Chinese import levels for August were also reported, at up 7.0% year on year. Consumer inflation in China rose 2.6% in August, year on year, which was in line with expectations. China industrial production figures are due out Tuesday. There was also strong GDP data coming out of Japan Monday. Asian stocks were lifted on the upbeat economic data coming out of the region. Traders and investors are already looking ahead to next week’s meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC). Last Friday’s weaker than expected U.S. jobs report did not really shed any fresh light on whether the Fed might start to “taper” its monthly bond-buying program sooner or later. Still, it appears a slight majority of the market place believes the U.S. central bank at next week’s meeting will announce it will begin to scale back its quantitative easing. U.S. economic data due for release Monday is light and includes the employment trends index and consumer installment credit.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today. Bulls have regained the slight overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 1,663.80 and then at 1,667.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,650.00 and then at 1,639.00. 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 overall near-term technical advantage and have regained upside near-term momentum. 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 to bullish early today. Shorter-term technical resistance is located at the August high of 3,148.00 and then at 3,160.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,130.50 and then at 3,120.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer steady early today. A four-week-old downtrend on the daily bar chart has been negated. Buy stops likely reside just above technical resistance at Friday’s high of 15,005 and then at 15,020. Sell stops likely reside just below technical support at 14,900 and then at 14,845. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day. The 9-day moving average is below 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 firmer early today on short covering in a bear market Prices Friday hit a contract low. 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 below 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 131 1/32 and then at Friday’s high of 131 15/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130 10/32 and then at 130 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 September U.S. T-Notes: Prices are higher early today on short covering after hitting a contract low Friday. Bears still have the strong overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below 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 123.00.0 and then at the overnight high of 123.11.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 122.28.0 and then at 122.16.0 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 slightly lower early today. Bulls and bears are on an overall level near-term technical playing field. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.550 and then at 82.795. Shorter-term support is seen at last week’s low of 82.300 and then at 82.000. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

October Nymex crude oil prices are weaker early today, on a corrective pullback from strong gains posted on Friday. Crude bulls still have the overall near-term technical advantage amid the Syria tensions. In October Nymex crude, look for buy stops to reside just above resistance at Friday’s high of $110.70 and then at $111.00. Look for sell stops just below technical support at $109.00 and then at $108.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed overnight, with corn and wheat weaker and soybeans firmer. Soybean bulls are maintaining their technical advantage. Corn and wheat bears remain in firm technical command. While the weather forecasts for the U.S. Corn Belt still call for very warm and dry conditions in the region in the next few days, it appears the late-summer weather market has played out in the grain futures markets—at least for now. It appears yield damage to the crops has already been mostly factored into present prices. For grain market prices to gain more upside in the near term, some new fundamental news will have to occur.