Monday, October 14–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The U.S. stock indexes are seeing selling pressure Monday morning as the U.S. Congress and President Obama over the weekend made little to no progress on reopening the government and agreeing on a measure to extend the government debt ceiling. Friday afternoon there was hope in the market place a weekend deal would be reached. However, some congressional leaders did meet Sunday and termed their meeting constructive. The U.S. government has now been closed for two weeks and late this week it’s likely the U.S. will reach its debt ceiling. World economic and political leaders have warned the U.S. government to get its act together and get its budget mess solved, or risk very serious markets and economic disruption worldwide. Still, the sense of the market place so far is that a last-minute deal will be reached by U.S. lawmakers. Markets have been remarkably calm with not much risk aversion the past couple weeks. The dearth of U.S. economic data the past two weeks has put a damper on many markets. There is no U.S. economic data due for release Monday, which is the U.S. Columbus Day holiday. The U.S. Treasury markets are closed Monday. Economic data released from China Monday showed its consumer price index rose to 3.1% on an annual basis versus a 2.6% rise in August. The CPI rise was a bit hotter than expected by the market place. In other economic data from China, new car sales rose in September at the fastest rate in eight months. China’s trade surplus narrowed by $15.2 billion in September from $28.5 billion in August. Overall, this latest economic data from China is deemed upbeat by the market place.–Jim 

U.S. STOCK INDEXES

S&P 500 futures: Prices are lower in early U.S. trading, on a corrective pullback from solid gains scored late last week. 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 1,700.00 and then at 1,705.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,681.40 and then at Friday’s low of 1,673.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0

Nasdaq index futures: Prices are lower 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. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,215.50 and then at last Friday’s high of 3,230.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,195.00 and then at Friday’s low of 3,175.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.

Dow futures: Prices are lower early today. Buy stops likely reside just above technical resistance at 15,100 and then at Friday’s high of 15,185. Sell stops likely reside just below technical support at Friday’s low of 15,030 and then at 15,000. Shorter-term moving averages are still 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

U.S. cash Treasury markets are closed Monday for the Columbus Day holiday.

December U.S. T-Bonds: Prices are firmer early today. Bears still have the overall near-term technical advantage. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 133 5/32 and then at Friday’s high of 133 15/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132 25/32 and then at Friday’s low of 132 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 December U.S. T-Notes: Prices are slightly higher 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 neutral to bearish early today. Shorter-term resistance lies at Friday’s high of 126.13.0 and then at 126.18.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Friday’s low of 125.30.0 and then at last week’s low of 125.26.5. 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 weaker early today. Bears remain in overall near-term technical command. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.475 and then at 80.685. Shorter-term support is seen at Friday’s low of 80.340 and then at 80.000. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

November Nymex crude oil prices are lower early today. 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 $102.00 and then at the overnight high of $102.52. Look for sell stops just below technical support at Friday’s low of $100.60 and then at $100.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight. Soybeans were firmer, corn near steady and wheat slightly lower. Harvest is at full speed in most areas of the Corn Belt. It is estimated that U.S. soybean harvest is 35% to 40% complete. Corn harvest is below that. But with much of USDA still closed, there will be no crop progress data this week and there remains a lack of fresh fundamental news for grain traders to digest, and that favors the bears. Technically, the corn bears are in full command, soybean bears have the slight chart advantage, and wheat bulls possess the slight near-term technical advantage.