Monday, October 21–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The flow of backed-up U.S. government economic data starts Monday. The big economic report early this week will be the U.S. employment report for September, which is due out Tuesday morning. The key non-farm payrolls number of the jobs report is expected to come in at up 180,000, while the overall unemployment rate is expected to be unchanged at 7.3%. It’s likely some of the postponed U.S. economic data that was due out during the two weeks the U.S. government was shut down will be cancelled. The fresh batch of U.S. economic data could make for more volatile price action in many markets that had seen a dearth of fresh U.S. economic/fundamental news for over two weeks. The U.S. dollar index is near steady Monday and hovering just above last week’s 10.5-month low. The market place has realized the U.S. budget/debt deal reached last week is just temporary, with the same situation potentially arising in the first quarter of next year. Also greenback-bearish is the dysfunction of U.S. lawmakers in October, which likely caused the U.S. Federal Reserve to delay any plans it had to start to wind down its quantitative easing of monetary policy. This week’s bunch of U.S. economic data is likely to have a significant impact on the U.S. dollar index, which is an important daily “outside market” that can impact many other markets. The weaker U.S. dollar has been an underlying bullish factor for most raw commodity markets the past couple weeks. Asian stock markets were supported Monday on positive comments coming from Chinese government officials, who said Sunday that Chinese government economic targets will be met, due to recent better China economic data. U.S. economic data due for release Monday includes the Chicago national activity index, existing home sales, and the weekly DOE energy stocks report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady in early U.S. trading and hit another new all-time 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- and 18-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 overnight high of 1,741.00 and then at 1,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,726.50 and then at 1,715.00. 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 and hit another 13-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 3,353.50 and then at 3,365.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,325.00 and then at 3,310.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are near steady early today and hovering near a four-week high. Buy stops likely reside just above technical resistance at Friday’s high of 15,351 and then at 15,400. Sell stops likely reside just below technical support at Friday’s low of 15,265 and then at 15,200. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are slightly lower early today on mild profit taking after hitting a 3.5-month high on Friday. Bulls still have good upside momentum. 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 neutral to bullish early today. Shorter-term resistance lies at the overnight high of 134 8/32 and then at last week’s high of 134 26/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at Friday’s low of 133 28/32 and then at 133 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 December U.S. T-Notes: Prices are near steady early today after hitting a four-month high on Friday. Bulls still have upside momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term resistance lies at the overnight high of 126.31.0 and then at last week’s high of 127.11.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.20.0 and then at 126.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The December U.S. dollar index is near steady early today and hovering near last week’s 10.5-month low. Bears remain in firm overall near-term technical control. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 80.000 and then at 80.155. Shorter-term support is seen at the overnight low of 79.680 and then at last week’s low of 79.550. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
November Nymex crude oil prices are lower early today, dropped below $100.00 and hit a nearly four-month low overnight. Bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. In November Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.95 and then at $101.00. Look for sell stops just below technical support at the overnight low of $99.77 and then at $99.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were firmer overnight. Short covering was featured in corn and soybeans following losses late last week. Wheat futures hit a fresh four-month high overnight amid recent good export demand for U.S. wheat and reports of weather problems with Russia’s wheat crop. USDA reports are flowing again, and Monday afternoon’s weekly crop progress data is expected to show U.S. corn and soybean harvesting past the half-way mark. Technically, the corn bears are still in command, soybean bears have the slight chart advantage, and wheat bulls possess the near-term technical advantage.
