Tuesday, October 1--Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The U.S. government is now partially shutting down as the
October 1 deadline for a government budget plan was not met
by U.S. lawmakers. The market place is greeting the news
with mild risk aversion so far Tuesday. However, if this
latest U.S. government debacle drags on, many markets will
become more skittish. Presently, most of the market place
expects the U.S. government shutdown to be short-lived. In
mid-October the U.S. government will hit its borrowing
limit. If that matter cannot be agreed upon by U.S.
lawmakers in a timely manner, it could be a much bigger
event for the market place than the current budget impasse.
Fresh budget news coming out of Washington Tuesday could be
market-sensitive. The other factor causing some risk
aversion in the market place early this week is turmoil in
the Italian government regarding a scandal involving former
prime minister Berlusconi. Many Italian government officials
have resigned. Gold is seeing some safe-haven buying
interest due to the U.S. budget and spending debacle. The
U.S. dollar index and crude oil prices are weaker on the
lack of progress on the U.S. budget. In other overnight
news, the Markit purchasing managers index (PMI) for the
European Union fell to 51.1 in September from 51.4 in
August. A reading above 50.0 suggests economic growth. The
EU PMI shows the bloc’s economic recovery is still fragile.
It was also reported Tuesday the overall unemployment rate
in the EU was 12% in August—the same as in July. China is
observing the Golden Week holiday and market activity in the
world’s second-largest economy will be quiet the rest of the
week. U.S. economic data due for release Tuesday includes
the weekly Goldman Sachs and Johnson Redbook retail sales
reports, the U.S. manufacturing PMI, construction spending,
the ISM manufacturing report on business, the global
manufacturing PMI and domestic auto industry sales.--Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early today. The shorter-
term moving averages (4-, 9- and 18-day) are neutral early
today. The 4-day moving average is below 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
the overnight high of 1,683.80 and then at 1,695.20. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at the overnight
low of 1,676.20 and then at Monday’s low of 1,667.00. Sell
stops are likely located just below those levels. Wyckoff’s
Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are higher early today. The
bulls still 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. 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
the overnight high of 3,230.25 and then at the September
high of 3,241.50. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at the
overnight low of 3,214.75 and then at 3,200.00. Sell stops
are likely located just below those levels. Wyckoff’s Intra-
Day Market Rating: 6.0.
Dow futures: Prices are firmer early today. Bulls have
faded. Buy stops likely reside just above technical
resistance at 15,140 and then at 15,200. Sell stops likely
reside just below technical support at 15,046 and then at
15,000. Shorter-term moving averages are neutral early
today, as the 4-day moving average is below 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 bearish 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
seeing a corrective and profit-taking pullback from recent
gains. The bulls still have some upside near-term technical
momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral to
bearish early today. Shorter-term resistance lies at 133
even and then at the overnight high of 133 14/32. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 132 22/32 and
then at 132 16/32. Sell stops likely reside just below those
levels. Wyckoff’s Intra-Day Market Rating: 4.0
December U.S. T-Notes: Prices are lower early today on
profit taking and a technical correction after hitting a
three-month high Monday. The bulls still have some upside
technical momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are
bearish early today. Shorter-term resistance lies at the
overnight high of 126.14.0 and then at Monday’s high of
126.21.5. Buy stops likely reside just above those levels.
Shorter-term technical support lies at the overnight low of
126.00.0 and then at 125.25.0 Sell stops likely reside just
below those levels. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. DOLLAR INDEX
The December U.S. dollar index is lower early today and hit
a fresh eight-month low overnight. Bears remain in overall
near-term technical command. Slow stochastics for the dollar
index are bearish early today. The dollar index finds
shorter-term technical resistance at the overnight high of
80.410 and then at Monday’s high of 80.490. Shorter-term
support is seen at the overnight low of 79.955 and then at
79.750. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady early today
after hitting a seven-week low Monday. Bears have downside
near-term technical momentum. In November Nymex crude, look
for buy stops to reside just above resistance at $103.00 and
then at $104.00. Look for sell stops just below technical
support at the overnight low of $101.84 and then at Monday’s
low of $101.05. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were mostly weaker overnight. Corn and soybeans are
still feeling the bearish effects of Monday’s bearish USDA
quarterly grain stocks report. The “risk-off” mentality in
the market place this week is also a bearish underlying
factor for the grains. U.S. harvest progress in soybeans
are corn will likely progress rapidly this week, and that’s
also bearish. Wheat bulls are making a good upside
progress. There are technical clues the wheat markets have
put in major lows.
