Jim's Morning Markets Report--August 1

August 1, 2013 02:07 AM
 

Thursday, August 1--Jim Wyckoff's Morning Web Log

NOTE: After 28 years of living in Cedar Falls, Iowa, my wife and I are
moving to western Iowa. The moving process will start on Wednesday
afternoon. My friend and fellow market analyst Ken Seehusen will produce
my reports while I’m busy moving. I’ll be back at work full throttle
next Monday morning.--Jim

The STOCK INDEXES

The September NASDAQ 100 was higher overnight as it extends the rally
off last week’s low. All eyes will be focused on Friday's jobs report
for July, which will set the tone and likely direction of the trading
into early August. Stochastics and the RSI are diverging but are bullish
signaling that sideways to higher prices are possible near-term. If
September extends this year’s rally, monthly resistance crossing at
3329.82 is the next upside target. Closes below the 20-day moving
average crossing at 3044.57 would confirm that a short-term top has been
posted. First resistance is the overnight high crossing at 3105.75.
Second resistance is monthly resistance crossing at 3329.82. First
support is the 20-day moving average crossing at 3044.57. Second support
is last Tuesday’s low crossing at 3023.50.

The September S&P 500 was higher overnight. However, stochastics and the
RSI are bearish hinting that a short-term top might be in or is near.
Closes below the 20-day moving average crossing at 1673.20 are needed to
confirm that a short-term top has been posted. If September renews the
rally off June’s low, upside targets will be hard to project with
September trading into uncharted territory. First resistance is last
Tuesday’s high crossing at 1695.50. First support is the 20-day moving
average crossing at 1673.20. Second support is the reaction low crossing
at 1666.00.

INTEREST RATES

September T-bonds were lower in overnight trading as they extend the
trading range of the past six weeks. Stochastics and the RSI remain
bearish signaling that sideways to lower prices are possible near-term.
If September renews the decline off July’s high, July’s low crossing at
132-02 is the next downside target. If September renews the rally off
July’s low, the reaction high crossing at 136-27 is the next upside
target. First resistance is the reaction high crossing at 136-27. Second
resistance is the reaction high crossing at 140-28. First support is
Wednesday’s low crossing at 132-13. Second support is July’s low
crossing at 132-02.

ENERGY MARKETS

September Nymex crude oil was higher overnight and trading above the 10-
day moving average crossing at 105.70. Stochastics and the RSI are
turning neutral to bullish signaling that sideways to higher prices are
possible near-term. Closes above the 10-day moving average crossing at
105.70 would confirm that a short-term low has been posted while opening
the door for a possible test of July’s high crossing at 108.93. If
September renews the decline off July’s high, the 38% retracement level
of the April-July rally crossing at 100.27 is the next downside target.
First resistance is the 10-day moving average crossing at 105.70. Second
resistance is July’s high crossing at 108.93. First support is the 25%
retracement level of the April-July rally crossing at 103.27. Second
support is the 38% retracement level of the April-July rally crossing at
100.27.

CURRENCIES

The September Dollar was higher due to short covering overnight leaving
Wednesday’s key reversal down and close below the 75% retracement level
of the June-July rally crossing at 81.70 unconfirmed. Stochastics and
the RSI are oversold but remain neutral to bearish signaling that
sideways to lower prices are possible near-term. If September extends
this month’s decline, the 87% retracement level of the June-July rally
crossing at 81.15 is the next downside target. Closes above the 20-day
moving average crossing at 82.82 would confirm that a short-term low has
been posted. First resistance is the 10-day moving average crossing at
82.05. Second resistance is the 20-day moving average crossing at 82.82.
First support is the 75% retracement level of the June-July rally
crossing at 81.70. Second support is the 87% retracement level of the
June-July rally crossing at 81.15.

GRAINS

December corn was lower overnight hinting that the two-day bounce off
Monday ’s low might have come to an end. This morning’s export sales
report along with the latest weather forecast for the Midwest hold the
keys to December’s close ahead of the weekend. Stochastics and the RSI
are oversold but remain neutral to bearish signaling that sideways to
lower prices are possible near-term. If December renews the decline off
June’s high, weekly support crossing at 4.66 3/4 is the next downside
target. Closes above the 20-day moving average crossing at 4.95 1/2 are
needed to confirm that a short-term low has been posted. First
resistance is the 10-day moving average crossing at 4.82 1/4. Second
resistance is the 20-day moving average crossing at 4.95 1/2. First
support is Monday’s low crossing at 4.71 1/4. Second support is weekly
support crossing at 4.66 3/4.

December wheat was lower overnight as it consolidates some of this
week’s short covering rally. Upside potential appears limited ahead of
August’s supply-demand report. However, I would not rule out a possible
run up to test July’s high crossing at 7.05 3/4 if we see end user
buying materialize along with an up tick in export demand. The low-range
close sets the stage for a steady to lower opening when the day session
begins trading. Stochastics and the RSI have turned bullish signaling
that sideways to higher prices are possible near-term. If December
renews the decline off July’s high, psychological support crossing at
6.50 is the next downside target. First resistance is the overnight high
crossing at 6.79 3/4. Second resistance is July’s high crossing at 7.05
3/4. First support is last Thursday’s low crossing at 6.58 1/4. Second
support is psychological support crossing at 6.50.

November soybeans were fractionally lower in overnight trading as it
consolidates above the 87% retracement level of the April-June rally
crossing at 12.04 1/2. Look for soybean prices to drift sideways to
lower into the August crop production report. After the report the
market may shift its focus to early-frost concerns for portions of the
western soybean belt. Stochastics and the RSI are oversold but remain
neutral to bearish signaling that sideways to lower prices are possible
near-term. If November extends the aforementioned decline, April’s low
crossing at 11.86 1/2 is the next downside target. Closes above the 20-
day moving average crossing at 12.52 3/4 are needed to confirm that a
short-term low has been posted. First resistance is the 10-day moving
average crossing at 12.36 3/4. Second resistance is the 20-day moving
average crossing at 12.52 3/4. First support is the 87% retracement
level of the April-June rally crossing at 12.04 1/2.
Second support is April’s low crossing at 11.86 1/2.


 

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