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

* LATEST MARKET DEVELOPMENTS *

A better-than-expected reading on monthly U.S. retail sales
reported on Tuesday helped to sink the gold and silver
markets and boost the U.S. stock market. That data helped to
mitigate last Friday’s weaker-than-expected U.S. employment
report that called into question the pace of the Fed’s newly
announced tapering of its monthly bond-buying program, also
called quantitative easing. Traders and investors will
continue to very closely scrutinize U.S. economic reports
after last Friday’s surprising jobs report.

There is another solid slate of U.S. economic data due out
Wednesday, including the weekly MBA mortgage applications
survey, the producer price index, the Empire State
manufacturing survey, the weekly DOE energy stocks report,
and the Federal Reserve’s beige book.

In overnight news, the European stock market hit a six-year
high, following the lead of solid gains in U.S. stock
indexes on Tuesday. The gains in European equities came
despite a downbeat German GDP report, showing annual growth
of only 0.4% in 2013. Generally, Euro zone economic data has
been upbeat in recent weeks.

Asian stock markets also closed higher Wednesday, following
the lead of the U.S.

Wyckoff’s Daily Risk Rating: 6.0 (There is a decent slate of
U.S. economic data Wednesday, which could move 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
 
U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer again in early U.S.
trading. Bulls are in overall technical command. 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 this
week’s high of 1,838.30 and then at the record high of
1,846.50. Buy stops likely reside just above those levels.
Downside support for active traders today is located at the
overnight low of 1,831.70 and then at 1,817.50. Sell stops
are likely located just below those levels. Wyckoff’s Intra-
day Market Rating: 6.0

Nasdaq index futures: Prices are higher early today as bulls
are in command. 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 resistance is located at
the December high of 3,594.75 and then at 3,600.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
3,570.75 and then at 3,550.00. Sell stops are likely located
just below those levels. Wyckoff’s Intra-Day Market Rating:
6.0.

Dow futures: Prices are higher in early U.S. trading. Bulls
are in technical control. Buy stops likely reside just above
technical resistance at 16,390 and then at this week’s high
of 16,415. Sell stops likely reside just below technical
support at 16,300 and then at 16,250. Shorter-term moving
averages are neutral early today, as the 4-day moving
average is below 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: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today. The
bulls have gained some upside momentum recently, but need to
show fresh power soon to keep it. Shorter-term moving
averages (4- 9- 18-day) are still bullish early today. The
4-day moving average is above the 9-day. The 9-day is above
the 18-day moving average. Oscillators (RSI, slow
stochastics) are neutral early today. Shorter-term
resistance lies at the overnight high of 130 24/32 and then
at 131 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the overnight
low of 130 17/32 and then at 130 even. Sell stops likely
reside just below those levels. Wyckoff’s Intra-Day Market
Rating: 5.0
 
March U.S. T-Notes: Prices are near steady early today.
Bulls faded Tuesday. Shorter-term moving averages (4- 9-
18-day) are still bullish early today. The 4-day moving
average is above 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 124.07.5 and then at
124.12.0. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
124.02.5 and then at 124.00.0. Sell stops likely reside
just below those levels. Wyckoff’s Intra-Day Market Rating:
5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is higher early today and seeing
some short covering. Slow stochastics for the dollar index
are bullish early today. The dollar index finds shorter-term
technical resistance at the overnight high of 81.075 and
then at last week’s high of 81.335. Shorter-term support is
seen at the overnight low of 80.750 and then at this week’s
low of 80.540. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

February Nymex crude oil prices are firmer early today on
more short covering after hitting a 6.5-month low last week.
Bears still have the overall near-term technical advantage.
In February Nymex crude, look for buy stops to reside just
above resistance at $93.38 and then at $94.00. Look for sell
stops just below technical support at the overnight low of
$92.43 and then at $92.00. Wyckoff’s Intra-Day Market
Rating: 5.5

GRAINS

Markets were again narrowly mixed overnight. Soybean bulls
have regained some upside technical momentum this week. Corn
bulls are holding their ground but need to show fresh power
soon. Corn and soybean traders continue to keep an eye on
South American weather, which is now heating up a bit and
may become a bullish market factor in the coming days. Focus
of grain traders is also on export demand for U.S. grains.