Jim's Morning Markets Report--July 3

July 3, 2013 01:39 AM
 

Wednesday, July 3--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Nymex crude oil futures prices pushed above $102.00 a barrel
and the highest level in over a year in overnight trading,
as the civil unrest in Egypt has the world market place
anxious. Egypt’s president has defiantly refused the army’s
call for him to step down. While Egypt is not a major oil
exporter, the tensions in that nation could be a proxy for
developments to come in other unsettled regions of the
Middle East, and beyond. It should not be a surprise that
there are fresh worries regarding the European Union and its
financial problems. There is a political crisis in Portugal
and there are concerns Greece can’t meet its debt
obligations. Two of Portugal’s key government ministers have
resigned in protest of the country’s austerity programs.
Most European bond yields rose Wednesday, except for
Germany’s, which fell, as European investors sought out the
safe-haven German debt. The Euro currency saw selling
pressure Wednesday due in part to these new worries. Some
better Euro zone retail sales and purchasing managers’ data
Wednesday only slightly assuaged the European markets. Asian
and European stock markets were mostly lower overnight on
the new geopolitical development. There was also some more
weak economic data coming out of China Wednesday, as the
country’s service sector PMI fell to 53.9 in June from 54.3
in May. Gold is seeing some mild safe-haven demand surface
due to the Egypt turmoil and the new concerns coming out of
the European Union. The U.S. Independence holiday is
Thursday and many U.S. markets close early Wednesday. The
important U.S. jobs report is out Friday morning. The key
non-farm payrolls number of that report is forecast to come
in at up around 160,000 in June, with the unemployment rate
seen down to 7.5% in June from 7.6% in May. The European
Central Bank and Bank of England monthly meetings are
Thursday. U.S. economic data due for release Wednesday
includes the weekly jobless claims report, the weekly MBA
mortgage applications survey, the Challenger job cuts
report, international trade report, the ISM non-
manufacturing report, the global services PMI, the weekly
DOE energy stocks report, and the ADP national employment
report.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today. 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 to bearish
early today. Today, shorter-term technical resistance comes
in at the overnight high of 1,608.20 and then at this week’s
high of 1,620.30. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at this week’s low of 1,593.50 and then at 1,580.00. Sell
stops are likely located just below those levels. Wyckoff's
Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today. 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 to bearish
early today. Shorter-term technical resistance is located at
the overnight high of 2,924.75 and then at Tuesday’s high of
2,941.25. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at the overnight
low of 2,897.00 and then at 2,884.25. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 4.5.

Dow futures: Prices are lower early today. Buy stops likely
reside just above technical resistance at 14,861 and then at
14,900. Sell stops likely reside just below technical
support at 14,750 and then at 14,700. Shorter-term moving
averages are neutral early today, as the 4-day moving
average is above the 9-day. The 9-day moving average is
below the 18-day moving average. Shorter-term oscillators
(RSI, slow stochastics) are neutral to bullish early today.
Wyckoff's Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are higher early today on
more short covering. Bears still have the overall near-term
technical advantage, but the bulls are having the better
week this week. Prices are still in a two-month-old
downtrend on the daily bar chart. Shorter-term moving
averages (4- 9- 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. Oscillators (RSI, slow stochastics)
are neutral to bullish early today. Shorter-term resistance
lies at the overnight high of 136 27/32 and then at 137
even. Buy stops likely reside just above those levels.
Shorter-term technical support lies at 136 even and then at
the overnight low of 135 26/32. Sell stops likely reside
just below those levels. Wyckoff's Intra-Day Market Rating:
5.5
 
September U.S. T-Notes: Prices are higher early today on
short covering. Bears still have the near-term technical
advantage, but bulls have gained just a bit of upside
momentum this week. Shorter-term moving averages (4- 9- 18-
day) are neutral bearish early today. The 4-day moving
average is above the 9-day. The 9-day is below the 18-day
moving average. Oscillators (RSI, slow stochastics) are
neutral to bullish early today. Shorter-term resistance
lies at the overnight high of 127.02.5 and then at
127.12.0. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
126.17.0 and then at 126.08.0 Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The September U.S. dollar index is lower in early U.S.
trading, on profit taking from recent gains that saw prices
hit a five-week high overnight. Bulls 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
83.935 and then at 84.000. Shorter-term support is seen at
83.500 and then at this week’s low of 83.170. Wyckoff's
Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Crude oil prices are solidly higher early today and hit a
fresh 13-month high. Bulls have upside near-term technical
momentum. In August Nymex crude, look for buy stops to
reside just above resistance at the overnight high of
$102.18 and then at $102.50. Look for sell stops just below
technical support at $100.00 and then at the overnight low
of $99.59. Wyckoff's Intra-Day Market Rating: 6.5

GRAINS

Markets were higher in overnight trading on more short
covering. Near-term supplies of corn and soybeans are still
tight, as reflected in cash basis levels. Weather in the
U.S. Corn Belt remains benign at present. It’s very likely
going to take a weather market scare in the Corn Belt in
the coming weeks to jump-start a significant rally in the
grain markets. History shows that trading action on Friday
and early next week is could be pivotal for the grain
markets. This timeframe can see grain price trends reverse,
or accelerate. Stay tuned!
 

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