* LATEST MARKET DEVELOPMENTS *
A feature in the market place late this week has been the stronger U.S. dollar index and weakening Euro currency. The greenback got a boost from a more hawkish FOMC statement on Wednesday, while the Euro has been hurt by ideas the European Central Bank could further ease its monetary policy by lowering interest rates at next week’s ECB meeting. Inflation in the EU was reported at a four-year low on Thursday, which opened the door farther for as easing move by the ECB. Also, recent economic data coming out of the European Union has not been robust. A weekly high close today (Friday) in the USDX and/or a weekly low close in the Euro currency futures would suggests those two markets are reversing previous near-term price trends. China’s manufacturing PMI rose to 51.4 in October versus 51.1 in September, it was reported overnight. The latest PMI figure beat expectations and suggests the world’s second-largest economy continues to expand in a stable manner. That’s a bullish underlying factor for the raw commodity sector. However, another report released Friday showed China’s housing market continues to be worrisomely hot. The recent rise in China’s short-term interest rates also has the market place somewhat concerned. U.S. economic data due for release Friday includes the manufacturing purchasing managers index, the ISM manufacturing report on business, and domestic auto sales. Federal Reserve officials will also be making speeches Friday, which will be closely scrutinized by the market place.–Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer in early U.S. trading. These bull market runs in the stock indexes are very mature, with the bullish notions becoming too pervasive. That’s a warning signal of a top being close at hand. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9- and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at Thursday’s high of 1,764.00 and then at the record high of 1,773.10. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,750.50 and then at 1,734.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are higher early today. 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 Thursday’s high of 3,394.00 and then at this week’s high of 3,401.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 3,360.75 and then at 3,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are firmer early today. A bearish “key reversal” on the daily chart this week is one early clue that a market top is in place. Buy stops likely reside just above technical resistance at Thursday’s high of 15,585 and then at 15,600. Sell stops likely reside just below technical support at 15,477 and then at 15,400. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5U.S.
TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are lower early today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 134 23/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 10/32 and then at 134 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower early today on profit taking. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 127.09.0 and then at 127.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.31.0 and then at 126.23.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is solidly higher early today and hit a fresh two-week high on more short covering. While bears remain in overall near-term technical control, the bulls are making a strong move. A bullish weekly high close on Friday would begin to suggest a market low is in place. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 80.865 and then at 81.000. Shorter-term support is seen at the overnight low of 80.320 and then at 80.000. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are lower early today and hit a fresh four-month low overnight. Bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. In December Nymex crude, look for buy stops to reside just above resistance at the overnight high of $96.65 and then at $97.00. Look for sell stops just below technical support at $95.50 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were mostly weaker overnight. The stronger U.S. dollar index late this week is a bearish underlying factor for the grains. There has been very good U.S. harvest progress and that has been bearish for corn and soybeans. That weakness in corn and soybeans has spilled over into the wheat market. Technically, the corn bears are still in firm command, while soybeans are technically neutral on a near-term basis and wheat bears have the near-term technical advantage.
