Friday, November 15--Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place is still buzzing about the “dovish” remarks
made Thursday by Federal Reserve Chair nominee Janet Yellen
to the U.S. Senate Banking Committee. During questioning by
senators Yellen said U.S. monetary policy needs to remain
very accommodative so that the U.S. economy can grow faster
and unemployment can decline further. Yellen also said she
would continue current Fed Chairman Ben Bernanke’s monetary
policies and said the U.S. economy still needs monetary
stimulus because it is performing below its potential. Not
unexpectedly, the market place read Yellen’s remarks as
being in the dovish monetary policy camp.
While Yellen’s remarks were not surprise to the market
place, it seems the market place has moved back its
collective timeframe for the Fed to begin “tapering” its
quantitative easing of U.S. monetary policy—or at least the
matter has become more of an uncertainty. Some market
watchers think the Fed may announce it is cutting back on
its monthly bond-buying program at its mid-December FOMC
meeting. However, other market watchers don’t expect the Fed
to make any tapering move until the second quarter of 2014,
at the earliest. I presently fall into the camp of the
latter. Recent U.S. economic data has just not been strong
enough to meet the Fed’s own criteria for backing off on
their printing of money.
By the way, the market place also read the well-spoken
Yellen’s testimony to the Senate committee on Thursday as
very well received by the senators. Many TV commentators
said the senators treated Yellen with “kid gloves.” This
strongly hints she will breeze through the confirmation
process on her way to becoming the next head of the U.S.
central bank.
In other news, the European Union released another very low
inflation report Friday, showing a four-year-low reading of
0.7% in October, on an annualized basis. This low reading
will allow the European Central Bank to also maintain its
very accommodative monetary policy for quite some time to
come.
U.S. economic data due for release Friday includes the
Empire State manufacturing survey, industrial production and
capacity utilization and monthly wholesale trade
inventories.
Thursday’s Wyckoff’s Daily Risk Rating: 5.0 (The market
place remains calm heading into the weekend. It’s been a
while since major geopolitical issues impacted the market
place. That makes me wonder how long this calmness will
last.)
(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).
--Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer in early U.S. trading and
hit another record high overnight. 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 bullish early today. Today, shorter-term
technical resistance comes in at the overnight high of
1,792.30 and then at 1,800.00. Buy stops likely reside just
above those levels. Downside support for active traders
today is located at the overnight low of 1,786.90 and then
at Thursday’s low of 1,778.00. Sell stops are likely located
just below those levels. Wyckoff’s Intra-day Market Rating:
6.0
Nasdaq index futures: Prices are firmer early today and hit
another 13-year high overnight. 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 to bullish early today.
Shorter-term technical resistance is located at the
overnight high of 3,421.25 and then at 3,435.00. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at 3,400.00 and then at
Thursday’s low of 3,386.75. Sell stops are likely located
just below those levels. Wyckoff’s Intra-Day Market Rating:
6.0.
Dow futures: Prices are firmer early today and hit a new
record high overnight. Buy stops likely reside just above
technical resistance at 15,900 and then at 15,950. Sell
stops likely reside just below technical support at 15,800
and then at Thursday’s low of 15,765. 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: 6.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are weaker early today.
Shorter-term moving averages (4- 9- 18-day) are still
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 25/32 and then at this week’s high of 132 31/32.
Buy stops likely reside just above those levels. Shorter-
term technical support lies at Thursday’s low of 132 1/32
and then at last week’s low of 131 18/32. Sell stops likely
reside just below those levels. Wyckoff’s Intra-Day Market
Rating: 4.5
December U.S. T-Notes: Prices are weaker early today.
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 early today. Shorter-
term resistance lies at the overnight high of 126.31.0 and
then at 127.08.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at Thursday’s
low of 126.13.5 and then at 126.08.0. 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 near steady early today.
Slow stochastics for the dollar index are bearish early
today. The dollar index finds shorter-term technical
resistance at the overnight high of 81.210 and then at
81.350. Shorter-term support is seen at this week’s low of
80.800 and then at 80.500. Wyckoff’s Intra Day Market
Rating: 5.0
NYMEX CRUDE OIL
December Nymex crude oil prices are near steady early today.
Prices Thursday hit a 4.5-month low. Bears have the overall
near-term technical advantage. Prices are in an 11-week-old
downtrend on the daily bar chart. In December Nymex crude,
look for buy stops to reside just above resistance at the
overnight high of $94.30 and then at $95.00. Look for sell
stops just below technical support at $93.00 and then at
Wednesday’s low of $92.51. Wyckoff’s Intra-Day Market
Rating: 4.5
GRAINS
Markets were again mixed overnight. Traders will get some
fresh news this morning, with the weekly USDA export sales
report, delayed by one day due to the U.S. holiday on
Monday. Corn bulls have faded again. Soybean bulls still
have some upside technical momentum. Wheat is still
technically bearish but will remain a follower for at least
the near term.
