Jim's Morning Markets Report--June 26

June 26, 2013 01:29 AM
 

Wednesday, June 26--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Gold prices sank to a nearly three-year low in overnight
trading. The yellow metal has seen weak-handed long
liquidation and technical short-selling due to several
factors, including ideas the U.S. economy is getting strong
enough that the Federal Reserve will begin to scale back its
monetary stimulus program. A strong batch of U.S. economic
data on Tuesday further bolstered those notions. A cash
crunch in China just recently has also worked to reduce
demand for physical gold in that nation. Also, major gold
consumer India is also seeing slack demand for physical gold
after the Indian government slapped additional duties on the
import of gold in order to reduce its trade deficit. Other
raw commodity markets are also seeing selling pressure due
to the likelihood of the U.S. Fed "tapering" its monthly
bond-buying program in the coming months, and because of
worries about China’s economy. Asian stock markets were
mixed overnight as the credit crunch in China appeared to
ease just a bit Wednesday following reports Tuesday that the
People’s Bank of China said the liquidity tightness was only
temporary and would be dealt with effectively. European
stocks were mostly higher on a much better consumer
sentiment report from Germany. European Central Bank
President Mario Draghi said Wednesday the ECB will keep its
monetary policy accommodative for the foreseeable future.
Draghi’s statement echoed other major central bank officials
who earlier this week made more dovish remarks. There is
some speculation in the market place that Fed Chairman Ben
Bernanke believes the market place misinterpreted the
results of last week’s FOMC meeting as too hawkish. There’s
an old market adage that says a market is the most bearish
at the very bottom in price--just before the market starts
to turn up. The market place’s general attitude toward gold
is presently the most bearish I’ve seen it in a very, very
long time. There’s also an old market adage that rings very
true: The majority of traders are wrong most of the time. As
the majority of the market place appears to be very bearish
the gold market, it can be argued from a market psychology
perspective that the bottom must be close at hand for the
gold market.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today, on more of a
corrective bounce from recent selling pressure that saw
prices Monday hit a two-month low. Bears still have some
near-term momentum on their side. The shorter-term moving
averages (4-, 9- and 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. Short-term oscillators (RSI, slow
stochastics) are bullish early today. Today, shorter-term
technical resistance comes in at 1,600.00 and then at
1,610.00. Buy stops likely reside just above those levels.
Downside support for active traders today is located at the
overnight low of 1,573.30 and then at this week’s low of
1,553.80. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today on a
corrective bounce from Monday’s move to a two-month low.
Bulls have lost their overall near-term technical advantage.
The shorter-term moving averages (4- 9-and 18-day) are
bearish early today. The 4-day moving average is below the
9-day. The 9-day average is below the 18-day. Short-term
oscillators (RSI, slow stochastics) are neutral to bullish
early today. Shorter-term technical resistance is located at
the overnight high of 2,876.75 and then at 2,885.00. Buy
stops likely reside just above those levels. On the
downside, short-term support is seen at the overnight low of
2,845.75 and then at this week’s low of 2,817.75. Sell stops
are likely located just below those levels. Wyckoff's Intra-
Day Market Rating: 5.5.

Dow futures: Prices are firmer early today on a technical
bounce after prices Monday fell to a two-month low. Bulls
have lost their overall near-term technical advantage. Buy
stops likely reside just above technical resistance at
14,800 and then at 14,850. Sell stops likely reside just
below technical support at 14,690 and then at 14,655.
Shorter-term moving averages are bearish early today, as the
4-day moving average is below the 9-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: 5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are near steady early today,
supported by short covering in a bear market. Prices Monday
hit a contract low. Bears still have the solid overall near-
term technical advantage. Prices are in a two-month-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 neutral early today. Shorter-term resistance lies at the
overnight high of 134 23/32 and then at 135 even. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 133 20/32 and
then at the contract low of 133 4/32. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 5.0
 
September U.S. T-Notes: Prices are slightly firmer early
today on tepid short covering after hitting a contract low
on Monday. Bears still have the strong 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 to bullish
early today. Shorter-term resistance lies at the overnight
high of 126.02.5 and then at this week’s high of 126.17.5.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at the overnight low of
125.10.5 and then at the contract low of 125.00.5 Sell
stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The September U.S. dollar index is higher in early U.S.
trading and hit a fresh three-week high overnight. Slow
stochastics for the dollar index are bullish early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 83.125 and then at 83.260. Shorter-
term support is seen at the overnight low of 82.735 and then
at this week’s low of 82.440. Wyckoff's Intra Day Market
Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are near steady early today. Trading has
been choppy recently. Bulls and bears are on an overall
level near-term technical playing field. In August Nymex
crude, look for buy stops to reside just above resistance at
this week’s high of $96.09 and then at $97.00. Look for sell
stops just below technical support at $95.00 and then at the
overnight low of $94.27. Wyckoff's Intra-Day Market Rating:
5.0

GRAINS

Markets were mixed in overnight trading. The grain market
bulls have faded recently amid the generally more bearish
attitudes in the raw commodity sector at present, following
last week’s Federal Reserve FOMC meeting. Weather in the
U.S. Corn Belt remains benign at present. However, many
areas in the central Corn Belt remain too wet, which has
prevented planting of corn and soybeans. The critical
early-July timeframe for the grain markets is approaching,
and that could prompt short covering and fresh speculative
buying interest in the grains in the coming days. There is
a USDA supply and demand report out Friday morning, which
will also update planted acres figures for corn and
soybeans. This USDA report will be one of the more
important ones of the year.
 

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