Tuesday, October 22–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Many markets were on hold overnight, awaiting the big U.S. economic report early this week: the employment report for September, which is 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 questionable how much the markets will react, and for how long, to the jobs data, because the report is out 18 days late. The market place may quickly discount the jobs report and look to upcoming fresher U.S. economic data for direction. In other overnight news, reports from China said housing prices in China are rising rapidly, which is read as a negative due to the inflationary implications that could cause China’s central bank to pull in the reins on its monetary policy. Recent economic data out of China has been upbeat, suggesting the world’s second-largest economy remains robust. China is a huge importer of raw commodities. The U.S. dollar index is slightly higher Tuesday on short covering ahead of the jobs report. The index is hovering just above last week’s 10.5-month low. Meantime, Nymex crude oil futures have fallen below the $100.00 level this week. The recently weaker greenback is bullish for the raw commodity sector, but the solid near-term price downtrend in crude oil prices is bearish—so these two key “outside market” forces have worked to cancel each other out. Other U.S. economic data due for release Monday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, construction spending, and the Richmond Fed business survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady in early U.S. trading and hovering near Monday’s all-time high. 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 record high of 1,742.00 and then at 1,750.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,727.20 and then at 1,715.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are slightly higher early today and hovering near Monday’s 13-year high. 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 Monday’s high of 3,362.25 and then at 3,375.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 3,342.50 and then at 3,325.00. 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 Monday’s four-week high. Buy stops likely reside just above technical resistance at last week’s high of 15,351 and then at 15,400. Sell stops likely reside just below technical support at Monday’s low of 15,300 and then at 15,265. 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: 5.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer early today. Bulls still have some 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 early today. Shorter-term resistance lies at Monday’s 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 the overnight low of 133 23/32 and then at Monday’s low of 133 18/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 December U.S. T-Notes: Prices are firmer early today. Bulls still have some 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 bearish early today. Shorter-term resistance lies at Monday’s 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 Monday’s low of 126.20.5 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 slightly higher 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 neutral early today. The dollar index finds shorter-term technical resistance at 80.000 and then at 80.155. Shorter-term support is seen at Monday’s 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
December Nymex crude oil prices are slightly lower early today 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 December Nymex crude, look for buy stops to reside just above resistance at $100.00 and then at $101.00. Look for sell stops just below technical support at the overnight low of $99.25 and then at $99.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were weaker overnight. Harvest progress in the U.S. Corn Belt, with many higher-than-expected yields, is a bearish underlying market factor for corn and soybeans.Monday afternoon’s weekly crop progress data showed the U.S. corn crop 39% harvested, which is less than expected. Soybean harvest was put at 69% complete, which was about in line with expectations. Technically, the corn bears are in command, soybean bears have the slight chart advantage, and wheat bulls still possess the near-term technical advantage.
