Jim Wyckoff’s Morning Blog

Jim Wyckoff, Senior Analyst, TraderPlanet.com, LLC

6.8.09

OVERNIGHT/EARLY MORNING DEVELOPMENTS

The market feature in overnight/early morning trading today is a stronger U.S. dollar and generally weaker U.S. commodity futures markets.

JIM’S MARKET THOUGHT OF THE DAY *

Is the downtrend in the U.S. dollar versus the other major currencies finally ending? There are some early technical clues that the downtrend has ended. Trading action last week did see a good corrective bounce from multi-month lows that did produce a bullish weekly high close on Friday. Also, a six-week-old downtrend on the daily bar chart has been penetrated on the upside and negated. However, the bulls have more heavy lifting to do in the near term to better suggest the greenback can sustain an uptrend. One thing the dollar index bulls should be a bit worried about is the fact that so many analysts are saying the U.S. dollar is at a bottom. Remember that when the “herd” thinks one thing, it’s usually the not the right thing—at least not timing-wise. –Jim

U.S. STOCK INDEXES

The U.S. stock indexes are lower in early morning trading today. Bulls still have some near-term technical momentum on their side after prices last week notched fresh multi-month highs.

September S&P 500: The shorter-term moving averages (4-, 9- and 18-day) are still 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 early today. Today, shorter-term technical support comes in at Friday’s low of 929.00 and then at last week’s low of 918.80. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at Friday’s high of 947.20 and then at 960.00. Buy stops are likely located just above those levels.

Wyckoff’s Intra-day Market Rating: 4.5

Today’s key near-term Fibonacci support/resistance level: 917.00.

PIVOT POINT LEVELS FOR SEPTEMBER S&P 500:

Pivot:————-  937.45
1st Support:——– 927.70
2nd Support:——– 919.25
1st Resistance:—– 945.90
2nd Resistance:—– 955.65

Nasdaq Index: 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 support is located at Friday’s low of 1,485.00 and then at 1,473.75. Sell
stops likely reside just below those levels. On the upside, short-term resistance is seen at Friday’s high of 1,500.50 and then at 1,515.00. Buy stops are likely located just above those levels.

Wyckoff’s Intra-Day Market Rating: 4.5

Today’s key near-term Fibonacci support/resistance level: 1,475.00

PIVOT POINT LEVELS FOR NASDAQ:

Pivot:———— 1,494.00
1st Support:—— 1,477.25
2nd Support:—— 1,460.75
1st Resistance:— 1,510.50
2nd Resistance:— 1,527.25

September Dow: Sell stops likely reside just below support at Friday’s low of 8,640 and then more stops just below support at 8,605. Buy stops likely reside just above shorter-term technical resistance at Friday’s high of 8,742 and then at 8,800. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-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: 4.5

Today’s key near-term Fibonacci support/resistance level: 8,558

PIVOT POINT LEVELS FOR SEPTEMBER DOW:

Pivot:———— 8,696
1st Support:—— 8,649
2nd Support:—— 8,594
1st Resistance:— 8,751
2nd Resistance:— 8,798

U.S. TREASURY BONDS AND NOTES

U.S. T-Bonds and T-Notes are firmer in early trading today, on short covering in a bear market. Bears still have the solid overall near-term technical advantage.

September U.S. T-Bonds: 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 technical support lies at the overnight low of 113 even and then at 112 16/32.
Sell stops likely reside just below those levels. Shorter-term technical resistance lies at the overnight high of 113 26/32 and then at 114 even. Buy stops likely reside just above those levels.

Wyckoff’s Intra-Day Market Rating: 5.5

Today’s key near-term Fibonacci support/resistance level: 114 26/32

September U.S. T-Bonds

138 27/32–lifetime high
123 31/32–100-day moving average
122 11/32–Previous Month’s high
118 –18-day moving average
115 17/32–9-day moving average
115 11/32–second pivot point resistance
114 27/32–4-day moving average
114 21/32–previous day’s high
114 12/32–previous month’s low
114 11/32–first pivot point resistance
113 21/32–pivot point
113 11/32–previous day’s close
112 31/32–previous day’s low
112 21/32–first pivot point support
111 31/32–second pivot point support
110 8/32–lifetime low

September U.S. T-Notes: Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Buy stops likely reside just above shorter-term technical resistance at 114.00.0 and then at 114.16.0. Shorter-term moving averages 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. Sell stop orders are likely located just below support at the overnight low of 113.00.0 and then at 112.16.0.

Wyckoff’s Intra Day Market Rating: 5.5

Today’s key near-term Fibonacci support/resistance level: 114.11.0

September U.S. T-Notes

125 24/32–lifetime high
120 14/32–previous month’s high
120 7/32–100-day moving average
117 17/32–18-day moving average
115 24/32–9-day moving average
115 23/32–second pivot point resistance
115 12/32–previous month’s low
115 2/32–previous day’s high
115 2/32–4-day moving average
114 19/32–first pivot point resistance
113 31/32–pivot point
113 16/32–previous day’s close
113 10/32–previous day’s low
112 27/32–first pivot point support
112 7/32–second pivot point support
109 –lifetime low

CURRENCIES

The September U.S. dollar index is higher in early trading today. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.97 and then at 82.50. Shorter- term support is seen at the overnight low of 81.03 and then at 80.50. Today’s key near-term Fibonacci
support/resistance level: 82.17.

Wyckoff’s Intra Day Market Rating: 6.0

The September Euro is lower in early electronic trading. Euro finds sell stop orders are likely located just below technical support at the overnight low of 1.3792 and then at 1.3750. Shorter-term technical resistance for the Euro is

seen at 1.3900 and then at the overnight high of 1.3986. Buy stops likely reside just above those levels. Slow stochastics for the Euro are bearish early today. Today’s key near-term Fibonacci support/resistance level: 1.3782.

Wyckoff’s IntraDay Market Rating: 4.0

GOLD

Gold is lower in early dealings today, on more profit-taking pressure after prices hit a fresh 3.5-month high last week. Bulls are fading amid the stronger U.S. dollar. For August gold, shorter-term technical resistance is seen at the overnight high of $961.10 and then at $970.00. Buy stops likely reside just above those levels. Sell stops likely
reside just below support at the overnight low of $945.20 and then at $940.00. Today’s key near-term Fibonacci support/resistance level: $945.00.

Wyckoff’s Intra-Day Market Rating: 4.0

CRUDE OIL

Crude oil prices are lower early today. Bulls are still technically strong amid an uptrend on the daily bar chart that is still firmly in place. In July crude, look for buy stops to reside just above resistance at the overnight high of $68.32 and then just above resistance at $69.00. Look for sell stops just below technical support at the overnight
low of $66.78 and then more sell stops just below support at $66.00. Today’s key near-term Fibonacci support/resistance level: $67.87.

Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Prices were lower in overnight trading, on a profit-taking pullback from recent strong gains. Trading has turned choppier. The key “outside markets” are bearish early today as the U.S. stock indexes are lower, crude oil prices are lower and the U.S. dollar is higher. Traders are looking ahead to the key USDA supply and demand report, out
on Wednesday morning. Weather in the Corn Belt at present is still deemed mostly benign, which does favor the bears.