Thursday, October 3–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The partial U.S. government shutdown is in its third day with little to no signs lawmakers’ federal budget impasse will end soon. There is growing anxiety in the world market place but not panic. If the situation drags on over the weekend and into next week, then trader and investor anxiety will increase. If confidence in the market place continues to wane, the odds will grow that market price volatility will increase. In mid-October the U.S. government will hit its borrowing limit. If that arguably more important matter cannot be agreed upon by U.S. lawmakers in a timely manner, then it could be a much bigger event for the market place than the current budget impasse. Fresh U.S. budget news coming out of Washington Thursday could be market-sensitive.There is a growing notion among market watchers that what some of my readers un-affectionately call “the Washington, D.C. clown show” will prompt the U.S. Federal Reserve to continue its monthly bond-buying program (quantitative easing) at least a while longer due to the damage the present government shutdown is doing to the U.S. economy and consumer confidence. Some U.S. government reports have been postponed due to the government furloughs, including Friday’s monthly employment report. Non-government U.S. economic reports will be issued as scheduled. Reports overnight said China’s official non-manufacturing purchasing managers’ index rose to a six-month high of 55.4 in September, from 53.9 in August. Meantime, the Markit European Union PMI rose to 52.2 in September from 51.5 in August—the fastest growth pace in over two years for the EU. Any PMI reading above 50.0 suggests economic growth. U.S. economic data due for release Thursday includes the global services PMI, the Challenger job-cut report, and the weekly jobless claims report.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early today. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below 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 bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,682.40 and then at this week’s high of 1,692.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,673.50 and then at this week’s low of 1,667.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker early today. The bulls still have the solid overall near-term technical advantage. 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 early today. Shorter-term technical resistance is located at the overnight high of 3,239.75 and then at this week’s high of 3,251.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,223.00 and then at 3,213.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early today. Bulls have faded. Buy stops likely reside just above technical resistance at Wednesday’s high of 15,055 and then at 15,100. Sell stops likely reside just below technical support at Wednesday’s low of 14,970 and then at 14,950. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker early today. The bulls still have some upside near-term technical momentum. Shorter-term moving averages (4- 9- 18-day) are still 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 bearish early today. Shorter-term resistance lies at the overnight high of 133 15/32 and then at this week’s high of 133 29/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 132 22/32 and then at 132 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 December U.S. T-Notes: Prices are weaker early today. The bulls still have some upside technical 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 bearish early today. Shorter-term resistance lies at the overnight high of 126.16.5 and then at the September high of 126.21.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.05.0 and then at this week’s low of 125.30.5 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The December U.S. dollar index is slightly lower early today and hit another eight-month low overnight. Bears remain in firm overall near-term technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 80.155 and then at Wednesday’s high of 80.380. Shorter-term support is seen at the overnight low of 79.830 and then at 79.750. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
November Nymex crude oil prices are slightly lower early today on a corrective pullback after Wednesday’s sharp gains. In November Nymex crude, look for buy stops to reside just above resistance at this week’s high of $104.23 and then at $105.00. Look for sell stops just below technical support at the overnight low of $103.45 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were firmer overnight. Corn and soybeans are seeing some short covering following recent selling pressure. Wheat bulls continue to gain upside near-term technical momentum. There is just not much bullish news in the grain markets at present. The “risk-off” mentality in the market place this week is a bearish underlying factor for the grains. U.S. harvest progress in soybeans are corn is progressing rapidly this week, which is also bearish. With much of USDA now closed, there will be a lack of fresh fundamental news for grain traders to digest, and that will likely favor the bearish camp.
