Monday, August 5–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news the HSBC China services purchasing managers index reading was steady in July versus June, at 51.3. A PMI above 50.0 suggests economic expansion. Later this week China trade and industrial production data will be released and will be closely scrutinized by the market place. The Markit company Euro zone composite purchasing managers index rose to 50.5 in July from 48.7 in June. That’s the first reading above 50.0 since January of 2012. The better PMI reading adds to a string of slightly improving economic data coming out of the European Union.Traders and investors have pretty much digested last Friday’s U.S. employment report that showed slightly weaker jobs growth than expectations, and added more uncertainty regarding when the Federal Reserve could start to “taper” its monthly bond-buying program, also known as quantitative easing. U.S. economic data due for release Monday includes the employment trends index, the ISM non-manufacturing report on business, and the global servicers PMI.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today after poking to a fresh all-time record high on Friday. Bulls 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 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 Friday’s record high of 1,705.00 and then at 1,715.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 1,696.20 and then at 1,685.40. 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 poked to a 12-year high overnight. The bulls 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 3,139.50 and then at 3,150.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,132.50 and then at Friday’s low of 3,112.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are slightly lower early today on mild profit taking after hitting a record high late last week. Bulls still have the solid near-term technical advantage. Buy stops likely reside just above technical resistance at Friday’s record high of 15,600 and then at 15,650. Sell stops likely reside just below technical support at 15,550 and then at 15,500. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are slightly lower early today. Bears have the solid overall near-term technical advantage as prices hover not far above Friday’s contract low. 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 resistance lies at the overnight high of 133 28/32 and then at 134 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 16/32 and then at 133 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are slightly lower early today. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 126.20.5 and then at 126.26.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.13.0 and then at 126.08.0 Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The September U.S. dollar index is slightly higher in early U.S. trading, on short covering. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.120 and then at 82.250. Shorter-term support is seen at the overnight low of 81.810 and then at last week’s low of 81.480. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are lower early today on some profit taking from recent gains. Bulls still have the overall near-term technical advantage. However, if prices continue to back off this week a bearish double-top reversal pattern would form on the daily bar chart. In September Nymex crude, look for buy stops to reside just above resistance at $106.50 and then at $107.00. Look for sell stops just below technical support at $105.00 and then at $104.50. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were weaker in overnight trading. The grain market bears are still in firm near-term command. The U.S. Corn Belt weather remains non-threatening for the corn and soybean crops and that remains fully bearish. The next major data points for the grain markets are likely to be the monthly USDA supply and demand report and the Pro Farmer Midwest crop tour.
