*Latest Market Developments*
Geopolitics is still in play in the market place Thursday. Unsettling to traders and investors are reports just out that an Air Algerie jetliner with 110 passengers on board went missing after take-off. The Russia-Ukraine situation is still in crisis mode, as two Ukrainian military jets were shot down Wednesday. Meantime, the Israel-Hamas fighting is also near the front burner of the market place as many airlines are prohibiting their jets from landing in Tel Aviv, Israel. Gold, the U.S. dollar index and U.S. Treasuries are seeing safe-haven demand due to the heightened geopolitical tensions the past week or so.
The much-anticipated HSBC preliminary China Purchasing Managers Index (PMI) rose to 52.0 in July compared to a final reading of 50.7 in June. The July number is a 1.5-year high. A PMI reading above 50.0 suggests expansion. Asian equities were boosted on the upbeat China PMI data. Meantime, the European Union’s composite PMI rose to 54.0 in July from 52.8 in June, for the highest reading in over three years. This news helped to boost European stock markets Thursday. This key economic data coming out of China and the EU suggest the world’s major economies are picking up some steam.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the U.S. flash manufacturing PMI, new residential sales and the Kansas City Fed manufacturing survey. Wyckoff’s Daily Risk Rating: 7.0 (Russia-Ukraine crisis and Irael-Hamas conflict are still front-burner matters for markets.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
–Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 September e-mini futures: Prices are firmer in early trading and hit yet another record high overnight. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight record high of 1,985.75 and then at 2,000.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,976.75 and then at Tuesday’s low of 1,965.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5
Nasdaq index futures: Prices are higher in early trading today and hit another 14-year high overnight. 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 bullish early today. Shorter-term technical resistance is seen at the overnight high of 3,990.75 and then at 4,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,977.00 and then at 3,960.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5
Dow futures: Prices are firmer in early U.S. trading and hovering just below the record high. Buy stops likely reside just above technical resistance at the record high of 17,080 and then at 17,100. Sell stops likely reside just below technical support at 17,000 and then at 16,950. 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: 6.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are weaker early today on profit taking from recent gains that saw prices hit a contract high this week. Bulls still have the firm overall near-term technical advantage on safe-haven demand. 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 the overnight high of 138 20/32 and then at the contract high of 138 27/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 138 even and then at 137 23/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 September U.S. T-Notes: Prices are weaker in early trading, on profit taking. Bulls still have the firm overall near-term technical advantage. 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 the overnight high of 125.15.0 and then at this week’s high of 125.17.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 125.02.0 and then at 125.00.0. 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 lower in early trading on mild profit taking after hitting a six-week high overnight. Bulls still have upside momentum on their side. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.985 and then at the June high of 81.170. Shorter-term support is seen at the overnight low of 80.815 and then at 80.700. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
September Nymex crude oil prices are slightly lower in early U.S. trading. Bulls still have some upside momentum. In September Nymex crude, look for buy stops to reside just above resistance at this week’s high of $103.45 and then at $104.00. Look for sell stops just below technical support at $102.50 and then at $102.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were firmer in overnight trading on more short covering in bear markets. While corn and soybean crop conditions are very good, overall, and weather forecasts are still non-threatening, the grain markets have been beaten down hard enough recently that commercial firms are stepping in to do some value-buying. That does hint that major market lows may not be far off now. Traders will closely examine Thursday morning’s weekly USDA export sales report, for more demand clues.
