Tuesday, July 16–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
There is a significant batch of U.S. economic data due out Tuesday that could move the markets. Data due for release includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the consumer price index, Treasury international capital data, industrial production and capacity utilization, and the NAHB housing market index. However, the world market place is looking ahead to Wednesday’s appearance by Federal Reserve Chairman Ben Bernanke before the U.S. House of Representatives, where he will report on U.S. monetary policy and the economy. Traders hope the Fed chief will offer fresh clues on when the Fed will start to back off on its monthly bond-buying program (quantitative easing). Many are still thinking the Fed will do such later this year and as soon as September. However, Bernanke in remarks last week hinted he wants QE to start to wind down later rather than sooner because he feels the U.S. economic recovery is still shaky. In overnight news, European Union imports and exports declined in May, suggesting the Euro zone will continue in economic contraction for yet another quarter, which would be the seventh straight. It was also reported Tuesday the German ZEW economic expectations index declined in July.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today after closing at an all-time record high close on Monday. 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 to bullish early today. Today, shorter-term technical resistance comes in at the all-time high 1,685.50 and then at 1,700.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 1,670.00 and then at 1,657.80. 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 and poked to another 12-year high overnight. 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 early today. Shorter-term technical resistance is located at the overnight high of 3,076.75 and then at 3,085.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 3,062.75 and then at 3,049.75. 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 are not far below the all-time high. Buy stops likely reside just above technical resistance at 15,450 and then at the all-time high of 15,510. Sell stops likely reside just below technical support at Monday’s low of 15,396 and then at 15,350. 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 on short covering. Bears still have the overall near-term technical advantage. Prices are in a 10-week-old downtrend on the daily bar chart. 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 bullish early today. Shorter-term resistance lies at the overnight high of 135 4/32 and then at 135 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 17/32 and then at 134 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 on 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 last week’s high of 126.25.0 and then at the July high of 127.02.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.14.0 and then at 126.00.0 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 as bulls are fading. A bear flag may be forming on the daily bar chart. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.270 and then at 83.500. Shorter-term support is seen at the overnight low of 82.855 and then at last week’s low of 82.600. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Crude oil prices are slightly higher early today. Bulls have upside near-term technical momentum. In August Nymex crude, look for buy stops to reside just above resistance at the overnight high of $106.74 and then at last week’s high of $107.45. Look for sell stops just below technical support at the overnight low of $105.91 and then at $105.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were solidly higher in overnight trading, on short covering and bargain hunting, and on surprising drops in corn and soybean crop ratings in the latest weekly USDA crop progress data, released late Monday afternoon. Weather forecasts for the U.S. Corn Belt have moderated from late last week but are still calling for warm and drier conditions for the region, with only slight changes for scattered rainfall. If rainfall and rainfall chances remain only spotty in the coming days, the weather concerns will once again quickly build in the corn and soybean markets. Corn is at or nearing its critical pollination period in much of the Corn Belt. Weather remains the major factor in the grain futures markets at present.
