Jim's Morning Markets Report--Dec. 4

December 4, 2013 01:07 AM
 

Wednesday, December 4--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Wednesday the heat gets turned up on a big week for economic
data. In the U.S., the monthly ADP national employment
report and Federal Reserve’s beige book highlight a busy
economic report day Wednesday. The European Central Bank’s
monthly monetary policy meeting is on Thursday and the U.S.
jobs report is on Friday.

Traders and investors for many weeks have been buzzing about
the precise timing of when the Fed will alter its monetary
policy and back off from its monthly bond-buying program—
called quantitative easing. So far this week’s batch of
generally upbeat U.S. data has fallen into the camp that
reckons the Fed will act to taper sooner rather than later.
However, the more critical economic data out this week is
yet to come. This week’s data will provide at least some new
insight on the timing of the Fed’s next move.

The European Union’s latest batch of economic data released
Wednesday was mostly downbeat, as gross domestic product
stagnated, consumer spending slowed, retail sales declined
and manufacturing activity also declined, from their
previous readings. These reports suggest the European
Central Bank will keep its monetary policy very
accommodative for some time to come. To extrapolate further,
the latest EU economic data suggests the upside is limited
for the Euro currency, which in turn is a bullish
development for the U.S. dollar.

U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the ADP national
employment report, the U.S. trade report, new residential
home sales, the weekly DOE energy stocks report, the global
services PMI, the beige book, and the ISM non-manufacturing
report on business.

Wyckoff’s Daily Risk Rating: 6.0 (The economic data release
pace picks up rapidly Wednesday and will remain strong the
rest of the week.)

(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 near steady in early U.S.
trading. The shorter-term moving averages (4-, 9- and 18-
day) are neutral early today. The 4-day moving average is
below the 9-day. The 9-day is above 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 the overnight high of
1,795.70 and then at Tuesday’s high of 1,801.50. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at Tuesday’s low of 1,786.30
and then at 1,775.00. 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. 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 3,485.25 and then at this week’s high of
3,501.25. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at this week’s
low of 3,466.25 and then at 3,450.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 5.5.

Dow futures: Prices are near steady early today. Buy stops
likely reside just above technical resistance at Tuesday’s
high of 15,955 and then at 16,000. Sell stops likely reside
just below technical support at Tuesday’s low of 15,850 and
then at 15,800. Shorter-term moving averages are bullish
early today, as the 4-day moving average is above the 9-day
and 18-day. The 9-day moving average is above the 18-day
moving average. Shorter-term oscillators (RSI, slow
stochastics) are bearish early today. Wyckoff's Intra-Day
Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today. The bears
have the overall near-term technical advantage as prices are
in a choppy, six-week-old downtrend on the daily bar chart.
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 bearish early today. Shorter-
term resistance lies at the overnight high of 130 3/32 and
then at this week’s high of 130 18/32. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at this week’s low of 129 20/32 and then at 129
10/32. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 4.0
 
March U.S. T-Notes: Prices are lower early today. Shorter-
term moving averages (4- 9- 18-day) are neutral early
today. The 4-day moving average is below the 9-day. The 9-
day is above the 18-day moving average. Oscillators (RSI,
slow stochastics) are bearish early today. Shorter-term
resistance lies at 125.00.0 and then at the overnight high
of 125.03.5. Buy stops likely reside just above those
levels. Shorter-term technical support lies at this week’s
low of 124.23.5 and then at 124.18.0. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 4.0

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher early today,
on tepid short covering. The greenback bears have the
overall near-term technical advantage amid recent choppy
trading. Slow stochastics for the dollar index are neutral
early today. The dollar index finds shorter-term technical
resistance at 81.00 and then at this week’s high of 81.185.
Shorter-term support is seen at this week’s low of 80.700
and then at last week’s low of 80.675. Wyckoff's Intra Day
Market Rating: 5.0

NYMEX CRUDE OIL

January Nymex crude oil prices are higher early today and
hit a fresh five-week high on heavy short covering and
bargain hunting. Price action Tuesday produced a bullish
upside "breakout" on the daily bar chart, to suggest a
market low is in place. A three-month-old downtrend on the
daily bar chart has been negated. In January Nymex crude,
look for buy stops to reside just above resistance at the
overnight high of $97.53 and then at $98.00. Look for sell
stops just below technical support at $96.00 and then at
$95.63. Wyckoff's Intra-Day Market Rating: 6.0

GRAINS

Markets were slightly higher overnight, on short covering.
Corn futures bears are still in technical control, but I
don’t expect to see strong downside price pressure at these
lower levels. Wheat futures have seen the technical posture
improve markedly to the point that I am confident a market
low is in place. Soybean bulls have the near-term technical
advantage. The South American planting and growing season is
off to a good start and that is a bearish factor for corn
and especially soybeans.
 

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