Jim's Morning Markets Report--Nov. 7

November 7, 2013 12:47 AM
 

Thursday, November 7--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The much-anticipated ECB monthly monetary policy meeting is
under way as of this writing Thursday morning. While there
are growing beliefs the ECB will at some point cut its key
interest rate and further ease its monetary policy, the
majority of analysts and economists polled believe the ECB
won’t make any policy move on Thursday. The market place
will closely scrutinize ECB President Mario Drahi’s remarks
at his press conference following the meeting. There is a
larger contingent of market watchers that believes the ECB
will move to ease its monetary policy at its December
meeting, when fresh economic statistics will also be
released by the ECB.

Recent EU inflation numbers are a bit worrisome as they
suggest deflationary conditions could be on the horizon for
the bloc. The recent EU inflation data bolsters ideas the
ECB could move to ease its monetary policy in an effort to
keep the tepid EU economic recovery moving forward.

There is also important U.S. economic data due for release
Thursday, including the weekly jobless claims report, the
advance GDP estimate for the third quarter, and ICSC chain
store sales trends.

Traders and investors are looking ahead to Friday’s key U.S.
employment report for October. The non-farm payrolls number
of that report is expected to have grown by around 120,000.
The jobs report will be a gauge in helping the market place
figure out when the Federal Reserve will start to wind down
its quantitative easing of monetary policy.

China’s Communist party meets this weekend, during which
time major plans and economic reforms are unveiled by the
leaders of the country. The world market place will be
closely watching for any proclamations coming from that
confab.

Wednesday’s Wyckoff’s Daily Risk Rating: 7.0 (ECB meeting
Thursday, including bank president Draghi’s press conference
following the meeting, could cause some market volatility.
Also, some important U.S. economic data is out Thursday that
could move the markets.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge
investor risk appetite in the world market place each day.
Each day I assess the "risk-on" or "risk-off" trader
mentality in the market place with a numerical reading of 1
to 10, with 1 being least risk-averse (most risk-on) and 10
being the most risk-averse (risk-off). Each morning I will
look at several markets and scan the world’s news headlines
to get a sense of how risk appetite in the market place will
shape for the trading day. For example, extreme readings in
my Daily Risk Rating would be a very bullish U.S. jobs
report that would fully cheer investors—Wyckoff’s Daily Risk
Rating would be 1. Conversely, a daily rating of 10 would be
an unexpected military confrontation in the Middle East that
included combat. Most days Wyckoff’s Daily Risk Rating will
be around neutral--between 4 and 6.)

--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower in early U.S.
trading. Mild profit taking is featured. The shorter-term
moving averages (4-, 9- and 18-day) are bullish early today.
The 4-day moving average is above the 9-day. The 9-day is
above 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
record high of 1,773.10 and then at 1,785.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at Wednesday’s low of
1,756.30 and then at last week’s low of 1,747.50. Sell stops
are likely located just below those levels. Wyckoff's Intra-
day Market Rating: 4.5

Nasdaq index futures: Prices are slightly lower early today
on mild profit taking. The shorter-term moving averages (4-
9-and 18-day) are neutral early today. The 4-day moving
average is below the 9-day. The 9-day average is above the
18-day. Short-term oscillators (RSI, slow stochastics) are
bearish early today. Shorter-term technical resistance is
located at 3,385.00 and then at last week’s high of
3,401.75. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at this week’s
low of 3,355.75 and then at 3,335.50. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 4.5.

Dow futures: Prices are near steady early today. Buy stops
likely reside just above technical resistance at Wednesday’s
record high of 15,685 and then at 15,700. Sell stops likely
reside just below technical support at Wednesday’s low of
15,610 and then at 15,525. 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: 5.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are near steady early today.
Bulls are fading. 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 to bearish early today. Shorter-term resistance lies
at Wednesday’s high of 133 9/32 and then at 133 20/32. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at this week’s low of 132 24/32 and
then at 132 16/32. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.0
 
December U.S. T-Notes: Prices are firmer early today.
Shorter-term moving averages (4- 9- 18-day) are neutral
early today. The 4-day moving average is below the 9-day.
The 9-day is above the 18-day moving average. Oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term resistance lies at 127.09.0 and then at 127.16.0. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 126.27.5 and
then at 126.20.0. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly higher early
today, on tepid short covering. Slow stochastics for the
dollar index are bearish early today. The dollar index finds
shorter-term technical resistance at Wednesday’s high of
80.800 and then at this week’s high of 81.025. Shorter-term
support is seen at this week’s low of 80.455 and then at
80.320. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

December Nymex crude oil prices are slightly higher early
today on tepid short covering after hitting a more-than-
four-month low on Tuesday. Bears have the overall near-term
technical advantage. Prices are in a nine-week-old downtrend
on the daily bar chart. In December Nymex crude, look for
buy stops to reside just above resistance at this week’s
high of $95.40 and then at $96.00. Look for sell stops just
below technical support at the overnight low of $94.46 and
then at $94.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Markets were mostly firmer overnight. Look for quieter
trading Thursday, ahead of Friday’s latest monthly supply
and demand report. That report is not expected to be
bullish and is likely to show record U.S. corn and soybean
production. There is also fresh weekly USDA export sales
data out Thursday morning. Technically, the corn bears are
in firm command, while soybeans are slightly bearish on a
near-term basis and wheat bears have the near-term
technical advantage.
 

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