Jim's Morning Markets Report--July 11

July 11, 2013 02:11 AM
 

Thursday, July 11--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Most U.S. markets had closed their day sessions Wednesday
afternoon when Federal Reserve Chairman Ben Bernanke in a
speech on Fed history said during a question-and-answer
session that the U.S. central bank still needs to be very
accommodative in its monetary policy for economic growth to
continue, and that the Fed will not raise interest rates
"for some time" to come. Bernanke’s remarks, along with the
FOMC minutes, released Wednesday afternoon, showing a deep
split between members on when to start to wind down the
Fed’s monthly bond-buying program (quantitative easing) has
at least temporarily changed the market place’s notions of
when QE will begin to be scaled back. It appears the market
place now believes the Fed will start to "taper" its monthly
bond buying program later rather than sooner. The past few
months have seen "Fed speak" and other Fed data roil the
market place, and Wednesday’s Fed events did not disappoint.
The U.S. dollar index dropped sharply on the Fed news, while
gold and U.S. Treasury bond and notes futures prices shot
higher. Other commodity markets also saw buying support on
the Fed news. The easy money policies of the Federal Reserve
and other major central banks of the world the past few
years have been a major bullish factor for the bond and raw
commodity markets. Asian and European stock markets rallied
on the Fed news. China equities were also boosted on notions
that China’s central bank or the Chinese government could
soon introduce measures to stimulate domestic growth. In
other overnight news, the central banks in Japan, Thailand,
Malaysia and South Korea kept their monetary policies
unchanged and said there are no inflationary pressures at
their latest meetings. However, Indonesia’s central bank
raised its key interest rate by 0.5% due to inflationary
worries. U.S. economic data due for release Thursday
includes the weekly jobless claims report, import and export
prices, ISCS chain store sales trends, and the Treasury
budget statement.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are higher early today and hit a
fresh six-week high. The shorter-term moving averages (4-,
9- and 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. Short-term oscillators (RSI, slow
stochastics) are bullish early today. Today, shorter-term
technical resistance comes in at the overnight high 1,667.30
and then at 1,672.30. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at the overnight low of 1,657.80 and then at
Wednesday’s low of 1,641.40. 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 and hit
a fresh six-week high. The shorter-term moving averages (4-
9-and 18-day) are bullish early today. The 4-day moving
average is above the 9-day and 18-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 located at the overnight high of 3,030.00 and
then at 3,036.75. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the
overnight low of 3,011.50 and then at 3,000.00. Sell stops
are likely located just below those levels. Wyckoff's Intra-
Day Market Rating: 6.0.

Dow futures: Prices are higher early today and hit a fresh
six-week high. Buy stops likely reside just above technical
resistance at 15,400 and then at 15,450. Sell stops likely
reside just below technical support at 15,325 and then at
15,275. 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 bullish
early today. Wyckoff's Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are sharply higher early
today, on short covering in a bear market. Bears still have
the solid overall near-term technical advantage. Prices are
in a nine-week-old downtrend on the daily bar chart.
Shorter-term moving averages (4- 9- 18-day) are still
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 bullish early today.
Shorter-term resistance lies at the overnight high of 134
26/32 and then at 135 even. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
134 even and then at the overnight low of 133 20/32. Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 6.0
 
September U.S. T-Notes: Prices are sharply higher early
today, on short covering. Bears still have the solid near-
term technical advantage. Shorter-term moving averages (4-
9- 18-day) are still 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
bullish early today. Shorter-term resistance lies at the
overnight high of 126.16.0 and then at 126.19.5. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at 126.00.0 and then at the
overnight low of 125.27.0 Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The September U.S. dollar index is sharply lower in early
U.S. trading and hit a fresh two-week low, on profit taking
and on the greenback-bearish Fed speak on Wednesday. Slow
stochastics for the dollar index are bearish early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 83.325 and then at 83.640. Shorter-
term support is seen at 83.000 and then at the overnight low
of 82.600. Wyckoff's Intra Day Market Rating: 3.0

NYMEX CRUDE OIL

Crude oil prices are modestly lower early today on profit
taking after hitting another fresh 14-month high overnight.
Bulls still have good upside near-term technical momentum.
In August Nymex crude, look for buy stops to reside just
above resistance at $107.00 and then at the overnight high
of $107.45. Look for sell stops just below technical support
at the overnight low of $105.70 and then at $105.00.
Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were narrowly mixed in overnight trading as traders
await the latest USDA monthly supply and demand report, due
out at late morning. Traders will likely quickly digest the
USDA data and then focus on weather forecasts for the U.S.
Corn Belt. Weather firms are calling for hot conditions and
less rain late this week and into next week. That’s a
bullish factor that has helped drive prices higher this
week. With much of the U.S. corn crop being planted late,
the key pollination stage of plant growth will now occur
during the late-July timeframe, which is typically the
hottest part of the summer. Temperatures above 90 degrees
during pollination can stunt yield potential for the corn
crop. Weekly USDA export sales data is also out Thursday
morning. There has been good demand for U.S. grains from
other countries recently.
 

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