Jim's Morning Markets Report--October 8

October 8, 2013 02:12 AM
 

Tuesday, October 8--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The partial U.S. government shutdown drags on and is in its
eighth day with still no serious movement from either
Democrats or Republicans. There were reports overnight that
some "test" bills are being discussed among the Senate and
House of Representatives. There is a steady unease in the
world market place at present, but there is still not yet
anything close to panic. The date now being pegged is
October 17—the date at which some U.S. government officials
now say the U.S. will start to default on its credit
obligations. It appears the budget impasse and government
closure could lead right up to the U.S. debt ceiling limit.
Some gold market bulls have expressed frustration their
metal has not seen stronger safe-haven demand amid the
latest U.S. government fiasco. Some are saying gold has lost
its safe-haven mojo because it’s been in a technical
downtrend for months. More likely is that the market place
now has "U.S. government dysfunction fatigue." Traders and
investors have recently been bombarded with news headlines
on the government’s shutdown and debt limit situations. They
are numb to the situation, at present. And in the past 18
months U.S. budget and debt ceiling wrangling had also
gripped the market place for a time. Most of the market
place still feels the U.S. government will pass a budget and
raise its debt ceiling at the 11th hour.—but not before the
usual grandstanding, jawboning, posturing, bickering and
politicking that U.S. lawmakers do in situations like this.
However, in the very unlikely scenario that the U.S.
government actually starts to default on its debt, or gets
its credit rating downgraded by a major credit rating
agency, then gold will exhibit its safe-haven status in the
market place, and do so in no uncertain terms. In other
overnight news, China’s services purchasing managers’ index
(PMI) showed a reading of 52.4 in September from 52.8 in
August, according to Markit/HSBC. German manufacturing
orders showed an unexpected decline in August, at down 0.3%
from July, as a 1.1% gain was forecast. The World Bank and
International Monetary Fund hold annual meetings in
Washington, D.C., at the end of this week. It would be at
the very least awkward to see the host nation and the
world’s leading economy and military hobbled by a government
shutdown in effect. Any proclamations or overtures made by
the U.S. at the meeting would be at least somewhat
discounted by the inability of U.S. lawmakers to agree on a
spending plan. U.S. economic data due for release Tuesday
includes the NFIB small business index, the weekly Goldman
Sachs and Johnson Redbook retail sales reports, the IDB/TIPP
economic optimism index, and the IMF world economic outlook.
Most U.S. government economic data is not being released due
to the U.S. government closure. However, the Fed’s FOMC
minutes will be released Wednesday and will be closely
scrutinized by the market place. Federal Reserve officials
are speaking this week. Traders and investors will be very
interested in seeing what these officials say about the U.S.
government shutdown’s impact on the U.S. economy.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early U.S.
trading and hit a fresh four-week low overnight. The
shorter-term moving averages (4-, 9- and 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. Short-
term oscillators (RSI, slow stochastics) are neutral to
bearish early today. Today, shorter-term technical
resistance comes in at Monday’s high of 1,678.50 and then at
last week’s high of 1,692.00. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at the overnight low of 1,662.90 and then
at 1,650.00. Sell stops are likely located just below those
levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early today.
The bulls still have the overall near-term technical
advantage. 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 neutral
to bearish early today. Shorter-term technical resistance is
located at Monday’s high of 3,232.75 and then at last week’s
high of 3,251.25. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the
overnight low of 3,198.00 and then at 3,189.25. Sell stops
are likely located just below those levels. Wyckoff's Intra-
Day Market Rating: 5.0.

Dow futures: Prices are near steady early today. Bulls have
faded recently. Buy stops likely reside just above technical
resistance at 14,900 and then at Monday’s high of 14,930.
Sell stops likely reside just below technical support at
14,800 and then at 14,750. Shorter-term moving averages are
bearish early today, as the 4-day moving average is below
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 to bearish early today. Wyckoff's
Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early today on some
profit taking from recent gains. Shorter-term moving
averages (4- 9- 18-day) are neutral early today. The 4-day
moving average is even with 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 the overnight high of 133 22/32 and then
at last week’s high of 133 29/32. Buy stops likely reside
just above those levels. Shorter-term technical support lies
at 133 even and then at 132 22/32. 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 on mild profit taking. Shorter-term moving averages
(4- 9- 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. Oscillators (RSI, slow stochastics) are
netural to bearish early today. Shorter-term resistance
lies at the overnight high of 126.16.0 and then at last
week’s high of 126.27.5. Buy stops likely reside just above
those levels. Shorter-term technical support lies at the
overnight low of 126.05.5 and then at last week’s low of
125.31.5. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly higher early
today. Bears remain in firm overall near-term technical
command. Slow stochastics for the dollar index are bullish
early today. The dollar index finds shorter-term technical
resistance at 80.285 and then at 80.500. Shorter-term
support is seen at last week’s low of 79.720 and then at
79.500. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

November Nymex crude oil prices are firmer early today on
short covering. Bulls and bears are on a level near-term
technical playing field. In November Nymex crude, look for
buy stops to reside just above resistance at the overnight
high of $103.94 and then at last week’s high of $104.38.
Look for sell stops just below technical support at the
overnight low of $102.85 and then at $102.00. Wyckoff's
Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed but mostly firmer overnight. Short
covering is featured. The "risk-off" mentality in the
overall market place, due to the U.S. government shutdown,
remains a mildly bearish underlying factor for all of the
grains. U.S. harvest of soybeans and corn is also
seasonally bearish for those markets. With much of USDA
closed, there is a keen lack of fresh fundamental news for
grain traders to digest, and that also favors the bearish
camp due to the uncertainty of the matter. All of the above
suggests sideways and choppy trading conditions in the
grains this week.
 

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