Jim's Morning Markets Report--June 28

June 28, 2013 01:33 AM
 

Friday, June 28--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The focus of the market place this week has been on the gold
market and the beating it has taken this year. On this last
trading day of the month and of the quarter, gold prices are
down around 30% in value this year and down around 25% in
the second quarter. Reports say that gold exchange traded
funds have shed around 22% of their value this year and have
lost 16% of their total funding in this quarter. And unlike
the big sell off in gold that occurred in April, this latest
downdraft has not seen buyers of physical gold step up to do
some bargain hunting. The gold bulls can point to the fact
that the market is now technically oversold and due for at
least a corrective bounce. Gold and the raw commodity sector
have been on the defensive for the past week, following last
week’s hawkishly perceived FOMC meeting of the U.S. Federal
Reserve. The market place read that meeting as suggesting
the Fed will start to "taper" its monthly bond buying
(quantitative easing) by the end of this year, and the
program could be finished by this time in 2014. However,
this week several U.S. Federal Reserve officials and even
other major world central bank officials have tried to
assuage the market place with more dovish remarks on their
monetary policies—but with limited success. More U.S. Fed
officials are set to give speeches on Friday, which will be
closely scrutinized by the market place. For the raw
commodity sector to come out of its bearish funk, gold
prices will have to at least stabilize and crude oil prices
will have to push above the psychological resistance level
of $100 a barrel. Crude oil prices this week have started to
rally after recent sideways and choppy trading. It will be
an extra important trading week next week. China
manufacturing data is due out Monday and the U.S. employment
report is due out next Friday. Asian stocks were firmer
overnight and European stocks were mixed Friday in
uneventful trading. Traders and investors are awaiting next
week’s batch of economic data. Book-squaring at the end of
the month and the quarter are also featured Friday. The Bank
of Japan’s deputy governor said Friday the past three months
of aggressive BOJ easing measures have been effective and he
said the need for further monetary stimulus is not
necessary. The deputy governor also said the BOJ is very
concerned about the present financial liquidity problems
that have surfaced in China. U.S. economic data due for
release Friday includes the ISM Chicago business survey and
the University of Michigan consumer sentiment survey.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher early today.
Bulls are regaining some near-term momentum, but have more
work to do to suggest an uptrend can be re-established. The
shorter-term moving averages (4-, 9- and 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. Short-
term oscillators (RSI, slow stochastics) are neutral to
bullish early today. Today, shorter-term technical
resistance comes in at the overnight high of 1,614.10 and
then at 1,625.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at Thursday’s low of 1,594.90 and then at Wednesday’s low of
1,573.30. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today. Bulls
are working to regain upside momentum, but have more heavy
lifting to do in the near term to suggest prices can trend
higher. The shorter-term moving averages (4- 9-and 18-day)
are still 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 this week’s high of 2,918.25 and then at
2,925.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at Thursday’s
low of 2,882.25 and then at 2,860.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 5.5.

Dow futures: Prices are firmer early today. Bulls are
regaining some upside momentum this week, but have more work
to do to suggest prices can begin to trend higher. Buy stops
likely reside just above technical resistance at 15,000 and
then at 15,040. Sell stops likely reside just below
technical support at Thursday’s low of 14,930 and then at
14,900. 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
to bullish early today. Wyckoff's Intra-Day Market Rating:
5.5

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are firmer early today on
more short covering in a bear market. 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 to bullish early today. Shorter-
term resistance lies at the overnight high of 136 4/32 and
then at 136 23/32. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the overnight
low of 135 21/32 and then at 135 even. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 5.5
 
September U.S. T-Notes: Prices are firmer early today on
more short covering. Bears still have the solid 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 bullish
early today. Shorter-term resistance lies at the overnight
high of 126.29.5 and then at 127.00.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 126.19.5 and then at
126.10.0 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 near steady in early U.S.
trading, on profit taking after prices hit a three-week high
on Thursday. Slow stochastics for the dollar index are
neutral early today. The dollar index finds shorter-term
technical resistance at the overnight high of 83.270 and
then at this week’s high of 83.430. Shorter-term support is
seen at 83.000 and then at Wednesday’s low of 82.735.
Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are firmer early today. Bulls have late
this week gained fresh upside near-term technical momentum.
In August Nymex crude, look for buy stops to reside just
above resistance at the overnight high of $97.82 and then at
$98.00. Look for sell stops just below technical support at
the overnight low of $96.55 and then at $96.00. Wyckoff's
Intra-Day Market Rating: 5.5

GRAINS

Markets were narrowly mixed in overnight trading. Short
covering and pre-report position evening are featured early
Friday, ahead of a USDA report out late Friday morning
which will update planted acres figures for corn and
soybeans. This USDA report will be one of the more
important ones of the year. The grain market bulls have
faded recently amid the generally bearish attitudes in the
raw commodity sector at present. Weather in the U.S. Corn
Belt remains benign at present. However, many areas in the
central Corn Belt remain too wet (Iowa and Minnesota),
which has prevented planting of corn and soybeans, or
stunted their early growth. Trading Friday and next week
could set the tone for the grain future markets for the
next several weeks.
 

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