Monday, October 13–Jim Wyckoff’s Mid-Morning Web Log

NOTE: I’m doing a “Mid-Morning Blog” report today, as I had some technical difficulties early this morning. Back to the normal “Early Morning Blog” on Tuesday.–Jim

MID-MORNING DEVELOPMENTS

The market features in mid-morning trading today are higher U.S. stock prices, higher crude oil prices and a lower gold prices. Currency futures and Treasury futures are closed today for the U.S. Columbus Day holiday.

* JIM’S MARKET THOUGHT OF THE DAY *

The world stock markets cheered the weekend news that the major governments of the world acted in harmony to add liquidity to the financial markets, including coordinated “jawboning” to try to talk the stock markets back up. However, one day does not make a trend. There is still rough sailing ahead. My bias is that market lows are close at hand in the U.S. stock indexes. However, my bias is also that when market lows are scored, price action will then turn more choppy and sideways, without strong and sustained uptrends. My bias is also that there is more downside price pressure ahead for crude oil, gold and other commodity markets. The world’s economies are still in dire straits.–Jim

U.S. STOCK INDEXES

The U.S. stock indexes are solidly higher in early morning trading, on short covering in a bear market. Bears still have the solid near-term technical advantage.

December S&P 500: 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical support comes in at 930.00. Sell stops likely reside just under that level. More sell stops likely reside under shorter-term technical support at today’s low of 909.30. Upside resistance for active traders today is located at 960.00 and then at 980.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-day Market Rating: 6.0

Today’s key near-term Fibonacci support/resistance level: 963.00.

December Nasdaq Index: 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 average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical support is located at 1,320.00. Sell stops likely reside just below that level, and then more sell stops are likely located just below technical support at the overnight low of 1,298.00. On the upside, short-term resistance is seen at today’s high of 1,352.00 and then at 1,375.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Today’s key near-term Fibonacci support/resistance level: 1,320.00

December Dow: Sell stops likely reside just below support at today’s low of 8,745 and then more stops just below support at 8,650. Buy stops likely reside just above shorter-term technical resistance at 9,000 and then just above resistance at 9,100. 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 to bullish early today. Wyckoff’s Intra-Day Market Rating: 6.0

Today’s key near-term Fibonacci support/resistance level: 9,010

U.S. TREASURY BONDS AND NOTES

U.S. T-Bonds and T-Notes futures prices are closed today, but in electronic trading prices were lower today. The Treasury market bulls are fading as near-term technical damage has been inflicted. However, any more serious stock market weakness will likely see buying interest move back into long T-Bond and T-Note positions. Remember that U.S. Treasuries are still one of if not the most safest investment vehicles in the world.

CURRENCIES

The December U.S. dollar index is solidly lower in mid-morning trading, on profit-taking pressure from recent gains. No serious chart damage has occurred. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.03 and then at 82.50. Shorter-term support is seen at today’s low of 81.25 and then at 81.00. Today’s key near-term Fibonacci support/resistance level: 80.67. Wyckoff’s Intra Day Market Rating: 4.0

GOLD

Gold is solidly lower in midday dealings today. Serious near-term chart damage has occurred in gold recently to suggest a near-term market top is in place. For December gold, shorter-term technical resistance is seen at $850.00 and then at $860.00. Buy stops likely reside just above those levels. Sell stops likely reside just below support at today’s low of $824.50 and then at this month’s low of $822.50. Today’s key near-term Fibonacci support/resistance level: $839.00. Wyckoff’s Intra-Day Market Rating: 4.0

CRUDE OIL

Crude oil prices are higher early today, on short covering in a bear market. In November crude, look for buy stops to reside just above resistance at today’s high of $82.52 and then just above resistance at 83.00. Look for sell stops just below technical support at $80.00 and then more sell stops just below support at today’s low of $79.45. Today’s key near-term Fibonacci support/resistance level: $83.25. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Prices are higher in morning trading, amid bullish “outside markets”–higher crude oil prices and a weaker U.S. dollar. However, today’s gains are just short covering in a bear market and the bulls have much more heavy lifting to do to suggest uptrends can be sustained. The one thing the corn and soybean market bulls have working in their favor is that “seasonal” studies do suggest prices bottoming out as harvest lows are historically put in place during this time of year. However, the “outside markets” will continue to play a role in price direction of the grains.