Wednesday, October 15–Jim Wyckoff’s Morning Web Log

OVERNIGHT/EARLY MORNING DEVELOPMENTS

The market features in overnight/early morning trading today are weaker U.S. stock index futures prices and lower crude oil prices.

* JIM’S MARKET THOUGHT OF THE DAY *

Tuesday’s price action in the U.S. stock indexes–downside price pressure following big gains Monday–suggests more of the same to come in the next several weeks, or longer: choppy and volatile trading conditions. Technical odds have increased that index bottoms are in place, but the stock market bulls have much heavy lifting to do to regain solid and sustainable upside technical momentum. The fact that U.S. Treasuries have sold off sharply recently is another clue that the worst of the world financial crisis is now past.–Jim

U.S. STOCK INDEXES

The U.S. stock indexes are weaker in early morning trading. Bears still have the overall near-term technical advantage.

December S&P 500: The shorter-term moving averages (4-, 9- and 18-day) are still bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical support comes in at the overnight low of 978.00. Sell stops likely reside just under that level. More sell stops likely reside under shorter-term technical support at 960.00. Upside resistance for active traders today is located at the overnight high of 1,008.30 and then at 1,025.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-day Market Rating: 4.0

Today’s key near-term Fibonacci support/resistance level: 979.00.

PIVOT POINT LEVELS FOR DECEMBER S&P 500:

Pivot:————- 1,014.60
1st Support:——– 962.70
2nd Support:——– 923.10
1st Resistance:— 1,054.20
2nd Resistance:— 1,106.10

December Nasdaq Index: The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical support is located at Tuesday’s low of 1,350.00. Sell stops likely reside just below that level, and then more sell stops are likely located just below technical support at 1,325.00. On the upside, short-term resistance is seen at the overnight high of 1,384.00 and then at 1,400.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Today’s key near-term Fibonacci support/resistance level: 1,386.00

PIVOT POINT LEVELS FOR DECEMBER NASDAQ:

Pivot:———— 1,404.70
1st Support:—— 1,311.35
2nd Support:—— 1,256.70
1st Resistance:— 1,459.35
2nd Resistance:— 1,552.70

December Dow: Sell stops likely reside just below support at 9,200 and then more stops just below support at 9,100. Buy stops likely reside just above shorter-term technical resistance at 9,300 and then just above resistance at 9,400. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 4.0

Today’s key near-term Fibonacci support/resistance level: 9,104

PIVOT POINT LEVELS FOR DECEMBER DOW:

Pivot:———— 9,439
1st Support:—— 9,023
2nd Support:—— 8,684
1st Resistance:— 9,778
2nd Resistance:—10,194

U.S. TREASURY BONDS AND NOTES

U.S. T-Bonds and T-Notes futures prices are mixed early today. Recent big downside price action has produced serious near-term chart damage, amid ideas the worst of the financial crisis is over.

December U.S. T-Bonds: Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance lies at the overnight high of 114 23/32 and then at 115 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 114 even and then at this week’s low of 113 27/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Today’s key near-term Fibonacci support/resistance level: 117 15/32

PIVOT POINT LEVELS FOR DECEMBER T-BONDS:

Pivot:———– 114 25/32
1st Support:—– 114 4/32
2nd Support:—– 113 26/32
1st Resistance:– 115 3/32
2nd Resistance:– 115 24/32

December U.S. T-Notes: Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Buy stops likely reside just above shorter-term technical resistance at the overnight high of 112.15.5 and then at Tuesday’s high of 112.27.0. Shorter-term moving averages 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. Sell stop orders are likely located just below support at 112.00.0 and then at this week’s low of 111.18.0. Wyckoff’s Intra Day Market Rating: 5.0

Today’s key near-term Fibonacci support/resistance level: 114.02.0

PIVOT POINT LEVELS FOR DECEMBER T-NOTES:

Pivot:———– 112 7/32
1st Support:—– 111 20/32
2nd Support:—– 111 8/32
1st Resistance:– 112 19/32
2nd Resistance:– 113 6/32

CURRENCIES

The December U.S. dollar index is weaker in early trading today. No serious chart damage has been inflicted but the bulls are fading and need to show power soon. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.09 and then at this week’s high of 82.48. Shorter-term support is seen at the overnight low of 81.40 and then at 81.00. Today’s key near-term Fibonacci support/resistance level: 80.67. Wyckoff’s Intra Day Market Rating: 5.0

The December Euro is near steady in early electronic trading. Euro finds sell stop orders are likely located just below technical support at the overnight low of 1.3541 and then just below support at 1.3500. Shorter-term technical resistance for the Euro is seen at the overnight high of 1.3691 and then at 1.3750. Buy stops likely reside just above those levels. Slow stochastics for the Euro are bullish early today. Today’s key near-term Fibonacci support/resistance level: 1.3877. Wyckoff’s Intra Day Market Rating: 5.0

GOLD

Gold is firmer in early dealings today, on short covering. For December gold, shorter-term technical resistance is seen at the overnight high of $851.40 and then at Tuesday’s high of $857.40. Buy stops likely reside just above those levels. Sell stops likely reside just below support at the overnight low of $837.90 and then at Tuesday’s low of $833.60. Today’s key near-term Fibonacci support/resistance level: $866.00. Wyckoff’s Intra-Day Market Rating: 5.5

CRUDE OIL

Crude oil prices are solidly lower early today and hit a fresh 12-month low overnight. In November crude, look for buy stops to reside just above resistance at $77.50 and then just above resistance at the overnight high of 79.17. Look for sell stops just below technical support at $75.00 and then more sell stops just below support at $74.00. Today’s key near-term Fibonacci support/resistance level: $82.25. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Prices were weaker in overnight trading, amid lower crude oil prices and weaker stock markets. Tuesday’s price action suggests the bears still have some near-term technical strength. If the key “outside markets” remain bearishly postured, then the path of least resistance for the grains will continue to be sideways to lower in the very near term.