Jim's Morning Markets Report--May 22

May 22, 2013 01:39 AM
 

Wednesday, May 22--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place is mostly on hold Wednesday morning,
awaiting Federal Reserve Chairman Ben Bernanke’s speech on
the economy and monetary policy before the Congress later in
the morning. The Fed’s FOMC minutes are also due out
Wednesday afternoon. Traders and investors will closely
scrutinize Bernanke’s remarks and the FOMC minutes for clues
on the U.S. central bank’s potential course of monetary
policy in the coming weeks and months. There has been a
growing belief in the market place that the Fed is aiming to
wind down its quantitative easing program (QE3) sooner
rather than later. The term presently bandied about is
"tapering" of the Fed’s massive monthly bond-buying program.
However, there is no clear consensus among market and Fed
watchers regarding what the Fed will do with its monetary
policy. There is even speculation that Bernanke on Wednesday
will re-emphasize his commitment to easy money policies in
the coming months. New York Federal Reserve Bank President
William Dudley late Tuesday said it will take three or four
months from now to determine if the U.S. central bank should
begin tapering its monthly bond-buying program. The Bank of
Japan at its regular meeting on Wednesday made no major
changes to its monetary policy, which was what the market
place expected. The BOJ said the Japanese economy is
starting to improve. The Japanese yen resumed its descent on
the BOJ news. On Thursday, there will be key manufacturing
data out of China released, which will also garner close
market attention. U.S. economic data due for release
Wednesday includes the weekly MBA mortgage applications
survey, existing home sales, the weekly DOE energy stocks
report, and the FOMC minutes.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher early today and
hovering near Tuesday’s all-time high. Bulls have the solid
overall near-term technical advantage. 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 neutral early today.
Today, shorter-term technical resistance comes in at
Tuesday’s record high of 1,673.00 and then at 1,685.00. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at Tuesday’s low
of 1,660.20 and then at 1,650.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-day Market
Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today
and hovering just below Tuesday’s 12-year high. Bulls have
the solid overall near-term technical advantage. 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 neutral early today.
Shorter-term technical resistance is located at Tuesday’s
high of 3,036.75 and then at 3,050.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at Tuesday’s low of 3,010.00 and then at
3,000.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are slightly higher early today and
hovering near Tuesday’s record high. Bulls have the solid
overall near-term technical advantage. Buy stops likely
reside just above technical resistance at Tuesday’s record
high of 15,405 and then at 15,450. Sell stops likely reside
just below technical support at Tuesday’s low of 15,305 and
then at 15,260. Shorter-term moving averages are bullish
early today, as the 4-day moving average is above the 9-day
and 18-day. The 9-day moving average is above 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

June U.S. T-Bonds: Prices are firmer early today on short
covering. Bears still have the overall near-term technical
advantage. Prices are in a three-week-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 144 25/32 and then at 145 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 144 4/32 and then at
144 even. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.5
 
June U.S. T-Notes: Prices are firmer early today on short
covering. Shorter-term moving averages (4- 9- 18-day) are
bearish early today. The 4-day moving average is below the
9-day and 18-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 132.04.5 and then at 132.08.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 131.28.5 and then at
131.24.0. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The U.S. dollar index is slightly higher in early U.S.
trading. Bulls still have the solid overall near-term
technical advantage. Slow stochastics for the dollar index
are bearish early today. The dollar index finds shorter-term
technical resistance at Tuesday’s high of 84.300 and then at
last week’s high of 84.515. Shorter-term support is seen at
the overnight low of 83.760 and then at 83.570. Wyckoff's
Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bulls still have
the slight near-term technical advantage but trading remains
choppy. In July Nymex crude, look for buy stops to reside
just above resistance at $96.00 and then at $96.50. Look for
sell stops just below technical support at the overnight low
of $95.34 and then at $95.00. Wyckoff's Intra-Day Market
Rating: 4.5

GRAINS

Markets were narrowly mixed in overnight trading. Corn
bulls are fading, which is also limiting the upside in
wheat. Soybean bulls are making a move that is impressive.
Monday’s weekly USDA crop progress report showed big
progress made planting the U.S. corn crop last week, and
that’s the major bearish factor for corn at present.
Soybeans see a tight U.S. cash market and an improving
chart posture inviting buying interest. Weather in the U.S.
Corn Belt is still a main focus for grain traders. Showers
and thunderstorms recently, and more in the forecast, are
still delaying seeding of corn and soybeans. However,
traders reckon the bearish effect of soil moisture levels
being recharged after last year’s major drought outweigh
the bullish planting delays.
 

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