Jim's Morning Markets Report--October 16

October 16, 2013 01:47 AM
 

Wednesday, October 16--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The U.S. government remains partially closed on day 16. The
U.S. Congress and President Obama are bumping right up
against the Thursday deadline for which the U.S. Treasury
says it will begin to run out of cash to pay its bills. The
sticking point appears to be the House of Representatives’
conservative Republicans who refuse to work with the Senate.
Meetings between U.S. lawmakers will be ongoing Wednesday,
to try to get a last-minute agreement on the U.S. budget and
debt ceiling that would reopen the U.S. government. The
present sense of the market place is that a U.S. budget/debt
deal will still be reached before the Thursday deadline.
Such is pretty much what the market place had expected all
along—a last-minute compromise. However, traders and
investors worldwide are becoming more anxious as Thursday
approaches and still no deal. If no deal is reached by U.S.
lawmakers by the end of Wednesday, or if negotiations
between congressional leaders break down, serious strains in
the markets would very quickly surface, including keen safe-
haven demand for gold. That scenario appeared unlikely
Tuesday, but on Wednesday morning anxiety in the market
place is on the rise. It could be a volatile day in the
markets on Wednesday and/or Thursday. The Fitch ratings
agency late Tuesday placed U.S. debt on watch and warned it
could downgrade the U.S. credit rating if no agreement on
the budget and debt ceiling is reached soon. In another sign
of keener risk aversion worldwide, the German government
auctioned a two-year treasury note Wednesday and there was
very strong demand for it—the strongest demand in over two
years. German debt is considered a safe-haven asset by
European investors. European and Asian markets were on hold
Wednesday, amid the U.S. budget/debt impasse and the looming
Thursday U.S. debt ceiling deadline. U.S. economic data due
for release Wednesday includes the weekly MBA mortgage
applications survey, the NAHB housing market index, Treasury
international capital data, and the Fed’s beige book.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early U.S. trading.
The shorter-term moving averages (4-, 9- and 18-day) are
neutral early today. The 4-day moving average is above the
9- and 18-day. The 9-day is below the 18-day moving average.
Short-term oscillators (RSI, slow stochastics) are neutral
early today. Today, shorter-term technical resistance comes
in at this week’s high of 1,709.40 and then at the all-time
high of 1,726.50. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at Tuesday’s low of 1,689.50 and then at this week’s low of
1,681.40. 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 and
hovering near this week’s 13-year high. The shorter-term
moving averages (4- 9-and 18-day) are neutral early today.
The 4-day moving average is above the 9-day and 18-day. The
9-day average is below the 18-day. Short-term oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term technical resistance is located at this week’s high of
3,263.50 and then at 3,275.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at Tuesday’s low of 3,234.00 and then at 3,220.00. Sell
stops are likely located just below those levels. Wyckoff's
Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher early today. Buy stops likely
reside just above technical resistance at 15,200 and then at
Tuesday’s high of 15,230. Sell stops likely reside just
below technical support at Tuesday’s low of 15,095 and then
at this week’s low of 15,065. Shorter-term moving averages
are neutral early today, as the 4-day moving average is
above the 9-day and 18-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

December U.S. T-Bonds: Prices are weaker early today and hit
another fresh three-week low overnight. Bears have the
overall 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 bearish early today. Shorter-term resistance lies at the
overnight high of 132 4/32 and then at Tuesday’s high of 132
18/32. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
131 21/32 and then at 131 10/32. Sell stops likely reside
just below those levels. Wyckoff's Intra-Day Market Rating:
4.5
 
December U.S. T-Notes: Prices are slightly lower early
today and hit another fresh three-week low overnight.
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 bearish early
today. Shorter-term resistance lies at the overnight high
of 125.28.5 and then at Tuesday’s high of 126.02.5. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 125.18.0 and
then at 125.10.0. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The December U.S. dollar index is weaker early today. Bears
remain in overall near-term technical control. Slow
stochastics for the dollar index are neutral early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 80.680 and then at the October high of
80.865. Shorter-term support is seen at this week’s low of
80.200 and then at 80.000. Wyckoff's Intra Day Market
Rating: 4.5

NYMEX CRUDE OIL

November Nymex crude oil prices are slightly higher early
today on tepid short covering. Bears still have the overall
near-term technical advantage. Prices are in a seven-week-
old downtrend on the daily bar chart. In November Nymex
crude, look for buy stops to reside just above resistance at
$102.00 and then at this week’s high of $102.52. Look for
sell stops just below technical support at last week’s low
of $100.60 and then at $100.00. Wyckoff's Intra-Day Market
Rating: 5.0

GRAINS

Markets were firmer overnight on short covering. Corn and
soybean harvesting is progressing in the U.S. Corn Belt
this week, but rains in part of the region have delayed it.
With much of USDA still closed, remains a serious lack of
fresh fundamental news for grain traders. Technically, the
corn bears are still in command, soybean bears have the
slight chart advantage, and wheat bulls possess the slight
near-term technical advantage.
 

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