Jim's Morning Markets Report--July 5

July 5, 2013 02:17 AM
 

Friday, July 5--Jim Wyckoff's Morning Web Log

Note: I am out of the office this morning. My friend and
fellow analyst/trader Ken Seehusen produced some of my
morning report. Ken's style is a bit different than mine,
but I think you'll also benefit from Ken's work.—Jim

OVERNIGHT DEVELOPMENTS

The market place was on hold early Friday, awaiting the U.S.
jobs report. Look for active trading in many markets, in the
immediate aftermath of the employment report. However,
activity is likely to quickly die down as many are still on
their U.S. Independence Day holiday.

Traders and investors are also anxiously watching
developments in Egypt. Crude oil prices have risen Friday on
news that a state of emergency has been declared in the Suez
and South Sinai provinces of Egypt. Reports said there was
an Islamist attack at the Arish Airport. While reports said
the Suez Canal is operating normally, any disruption of one
of the world’s most important major world waterways would be
very market-sensitive. Earlier this week the Egyptian
military overthrew the sitting president and installed its
own temporary leader.

European stocks were narrowly mixed Friday as the U.S. jobs
report was awaited. Traders are still digesting the somewhat
surprising news from the European Central Bank and the Bank
of England Thursday, in which both gave forward guidance and
said they would keep interest rates low for the foreseeable
future. The market place perceived central banks’ statements
to be firmly on dovish side. The Euro currency has seen
selling pressure following the ECB meeting.

The STOCK INDEXES

The September NASDAQ 100 was higher overnight as it extends
the rally off June’s low. Stochastics and the RSI remain
bullish signaling that sideways to higher prices are
possible near-term. If September extends the aforementioned
rally, the reaction high crossing at 2969.75 is the next
upside target. Closes below the 10-day moving average
crossing at 2899.20 would confirm that a short-term top has
been posted. First resistance is the reaction high crossing
at 2999.00. Second resistance is May’s high crossing at
3044.00. First support is the 10-day moving average crossing
at 2899.20. Second support is the 38% retracement level of
the November-May rally crossing at 2838.86.

The September S&P 500 was higher overnight as it extends the
rally off last Monday’s low. Stochastics and the RSI remain
bullish signaling that sideways to higher prices are
possible near-term. Closes above the 20-day moving average
crossing at 1610.46 would confirm that a low has been posted
while opening the door for additional gains. If September
renews the decline off May’s high, the 38% retracement level
of the November-May rally crossing at 1545.59 is the next
downside target. First resistance is the reaction high
crossing at 1648.70. Second resistance is May’s high
crossing at 1678.00. First support is the 10-day moving
average crossing at 1597.92. Second support is June’s low
crossing at 1553.80.

INTEREST RATES

September T-bonds were lower overnight as they consolidate
some of the rally off June’s low. Stochastics and the RSI
are neutral to bullish signaling that sideways to higher
prices are possible near-term. Closes above the 20-day
moving average crossing at 137-04 are needed to confirm that
a low has been posted and would open the door for additional
short-term gains. If September renews the decline off May’s
high, weekly support crossing at 130-24 is the next downside
target. First resistance is the 20-day moving average
crossing at 137-04. Second resistance is the reaction high
crossing at 140-28. First support is June’s low crossing at
133-04. Second support is weekly support crossing at 130-24.

ENERGY MARKETS

August Nymex crude oil was higher overnight as it extends
the rally off April’s low. Stochastics and the RSI are
overbought but remain bullish signaling that sideways to
higher prices are possible near-term. If August extends the
aforementioned rally, last April’s high crossing at 104.50
is the next upside target. Closes below the 20-day moving
average crossing at 97.16 would confirm that a short-term
top has been posted. First resistance is the overnight high
crossing at 102.19. Second resistance is last April’s high
crossing at 104.50. First support is the 20-day moving
average crossing at 97.16. Second support is the reaction
low crossing at 92.67.

CURRENCIES

The September Dollar was higher overnight as it extends the
rally off June’s low. Stochastics and the RSI are overbought
but remain neutral to bullish signaling that sideways to
higher prices are possible near-term. If September extends
the rally off June’s low, May’s high crossing at 84.83 is
the next upside target. Closes below the 20-day moving
average crossing at 82.37 would confirm that a short-term
top has been posted. First resistance is the 87% retracement
level of the May-June decline crossing at 84.31. Second
resistance is May’s high crossing at 84.83. First support is
the 10-day moving average crossing at 83.33. Second support
is the 20-day moving average crossing at 82.37.

GRAINS

The grain markets will begin trading at 8:30 EST. this
morning. Here is a recap of Wednesday’s trade.

July Corn closed up 5 1/2-cents at 6.78 1/4. July corn
closed higher on Wednesday as it consolidated some of
Monday’s decline. The high-range close sets the stage for a
steady to higher opening when Friday’s night session begins
trading. Stochastics and the RSI are diverging and are
turning neutral to bearish hinting that a short-term top
might be in or is near. Closes below Tuesday’s low crossing
at 6.51 would greatly increase the odds that a short-term
top has been posted. If July extends the rally off April’s
low, the 38% retracement level of the August-April decline
crossing at 6.91 1/2 is the next upside target. First
resistance is Monday’s high crossing at 6.90. Second
resistance is the 38% retracement level of the August-April
decline crossing at 6.91 1/2. First support is Tuesday’s low
crossing at 6.51. Second support is the reaction low
crossing at 6.40 1/2.

July wheat closed up 8 1/4-cents at 6.57 3/4. July wheat
closed higher due to short covering on Wednesday as it
consolidates some of the decline off June’s high. The mid-
range close sets the stage for a steady opening when
Friday’s night session begins trading. Stochastics and the
RSI are oversold but remain neutral to bearish signaling
that sideways to lower prices are possible near-term. If
July extends the decline off June’s high, weekly support
crossing at 6.25 3/4 is the next downside target. Closes
above the 20-day moving average crossing at 6.79 1/2 are
needed to confirm that a short-term low has been posted.
First resistance is the 10-day moving average crossing at
6.68 1/2. Second resistance is the 20-day moving average
crossing at 6.79 3/4. First support is Monday’s low crossing
at 6.43 3/4. Second support is weekly support crossing at
6.25 3/4.

July soybeans closed up 10 1/2-cents at 15.83 1/2.

July soybeans closed higher on Wednesday. The mid-range
close sets the stage for a steady to higher opening when
Friday’s night session begins trading. Stochastics and the
RSI are diverging but remain neutral to bullish signaling
that sideways to higher prices are possible. If July extends
this week’s rally, last September’s high crossing at 16.05
3/4 is the next upside target. Closes below the 20-day
moving average crossing at 15.31 1/4 would confirm that a
short-term top has been posted. First resistance is Monday’s
high crossing at 16.04 1/4. Second resistance is last
September’s high crossing at 16.05 3/4. First support is the
20-day moving average crossing at 15.31 1/4. Second support
is last Monday’s low crossing at 14.85 1/2.

 

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