Jim's Morning Markets Report--August 21

August 21, 2013 01:50 AM
 

Wednesday, August 21--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place is quieter early Wednesday, as traders and
investors await the Federal Reserve’s FOMC minutes that are
released in the afternoon. Market watchers will be looking
at the minutes for some clarity on the near future path of
U.S. monetary policy. Markets could become volatile in the
immediate aftermath of the FOMC minutes’ release. There is
also a world central bankers meeting in Wyoming that begins
Wednesday. However, Fed Chairman Ben Bernanke will not
attend it and no major proclamations are expected to come
out of that event. The recent turmoil in Asian currency and
financial markets has somewhat stabilized, at least for the
moment, Wednesday.  The Indian Rupee and the Indonesian
Rupiah currencies have been hardest hit. Indian and
Indonesian central bank officials are taking action to
stabilize their currencies, but likely with only very
limited success. There are still worries about an "Asian
contagion" situation that has in the past spooked markets
worldwide. Rising interest rates in the major world
economies have put pressure on the periphery currencies. The
higher rates in the major economies have started to reverse
the flows of investor monies that had been moving into the
periphery country markets the past few years. Just
Wednesday, a German government bond auction fetched the
highest yields in a year and a half. U.S. government bond
and note yields are also on the rise this week. An Asian
currency contagion would likely prompt keen safe-haven
demand for gold. After the FOMC minutes are digested by the
market place Wednesday afternoon attention will quickly turn
to Chinese manufacturing data that is due out Thursday.
China is the world’s second-largest economy, but the leading
worldwide importer of many key raw commodities. Traders and
investors are still watching the Egypt unrest, which
continues to see violence between citizens and government
militia. This situation has appeared to not worsen this
week, which has allowed traders to focus on other matters.
Any escalation in violence is likely to impact the market
place, and could also prompt a rise in demand for safe-haven
assets, including gold. As of this writing Wednesday
morning, breaking news reports said Syria has used chemical
weapons against its civilians, with hundreds killed. This
matter will be closely monitored by the market place, and is
yet another geopolitical hotspot that could flare up to
become a major markets factor.

U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, existing home
sales, the weekly DOE liquid energy stocks report and the
FOMC minutes.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today. The bulls
have faded. 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 is below the 18-day
moving average. Short-term oscillators (RSI, slow
stochastics) are neutral to bearish early today. Today,
shorter-term technical resistance comes in at this week’s
high of 1,656.50 and then at 1,670.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at this week’s low of 1,641.20 and
then at 1,625.00. Sell stops are likely located just below
those levels. Wyckoff's Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today. The
bulls still have the overall near-term technical advantage
but have faded. 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
neutral early today. Shorter-term technical resistance is
located at the overnight high of 3,084.00 and then at this
week’s high of 3,100.50. Buy stops likely reside just above
those levels. On the downside, short-term support is seen at
this week’s low of 3,060.25 and then at 3,050.00. Sell stops
are likely located just below those levels. Wyckoff's Intra-
Day Market Rating: 4.5.

Dow futures: Prices are lower early today after hitting a
six-week low Tuesday. Bulls have faded. Buy stops likely
reside just above technical resistance at 15,000 and then at
Tuesday’s high of 15,045. Sell stops likely reside just
below technical support at 14,900 and then at 14,850.
Shorter-term moving averages are bearish early today, as the
4-day moving average is below the 9-day and 18-day. The 9-
day moving average is below the 18-day moving average.
Shorter-term oscillators (RSI, slow stochastics) are neutral
early today. Wyckoff's Intra-Day Market Rating: 4.5

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. There are no early technical clues of a market
bottom being close at hand. 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 131 13/32 and then at 132 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at 131 even and then at Tuesday’s low of 130
13/32. 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 have the solid 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 Tuesday’s high of
125.09.0 and then at 125.16.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
125.00.0 and then at Wednesday’s low of 124.21.0 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 higher in early U.S.
trading, on short covering in a bear market. The bears still
have the overall near-term technical advantage. Slow
stochastics for the dollar index are neutral early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 81.170 and then at this week’s high of
81.415. Shorter-term support is seen at the overnight low of
80.925 and then at this week’s low of 80.770. Wyckoff's
Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

October Nymex crude oil prices are lower again early today
on more profit taking from recent gains. Bulls still have
the overall near-term technical advantage but are fading a
bit. In October Nymex crude, look for buy stops to reside
just above resistance at the overnight high of $105.35 and
then at $106.00. Look for sell stops just below technical
support at the overnight low of $104.43 and then at $104.00.
Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were higher in overnight trading, led by soybeans.
A weather market is playing out in the grains—especially
for soybeans and to a lesser degree corn. The western U.S.
Corn Belt has portions that remain very dry. The recent
good gains in corn suggest that market has put in a bottom.
For soybeans, the strong gains suggest prices can continue
to trend sideways to higher in the near term. Wheat will
follow the corn market. The Pro Farmer Midwest Crop Tour is
in progress. So far, the early results show good crop yield
potential, which has been a bit bearish.


 
 

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