Monday, October 12, 2009

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OVERNIGHT/EARLY MORNING DEVELOPMENTS

The market feature in overnight/early morning trading today is generally stronger raw commodity futures prices, amid a weaker U.S. dollar.

JIM’S MARKET THOUGHT OF THE DAY *

The “reflation trade” appears to be shifting into a higher gear. By that I mean that the weaker U.S. dollar has ignited inflation worries. So, traders are more inclined to want to hold “hard” assets like raw commodities, as an inflation hedge. What’s been somewhat odd with the recent market price action is that stocks and bond shave also rallied. Generally, when hard assets (raw commodities) rally, the “paper” assets like stocks and bonds do not. My bias is that stocks, bonds and raw commodity markets cannot all sustain rallies at the same time, and that one of those sectors will start to sell off soon.–Jim

U.S. STOCK INDEXES

The U.S. stock indexes are firmer in early morning trading today and have made a solid rebound from the early-October lows. Bulls still have upside near-term technical momentum after scoring bullish weekly high closes on Friday.

December S&P 500: Prices hit a fresh 12-month high overnight. 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical support comes in at the overnight low of 1,067.20 and then at Friday’s low of 1,058.60. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at 1,080.00 and then at 1,090.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-day Market Rating: 6.0

Today’s key near-term Fibonacci support/resistance level: 1,053.00.

PIVOT POINT LEVELS FOR DECEMBER S&P 500:

Pivot:————-  1,065.20
1st Support:——– 1,061.50
2nd Support:——– 1,054.90
1st Resistance:—– 1,071.80
2nd Resistance:—– 1,075.50

December Nasdaq Index: 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 bullish early today. Shorter-term technical support is located at the overnight low of 1,724.50 and then at Friday’s low of 1,707.00. Sell stops likely reside just below those levels. On the upside, short-term resistance is seen at 1,745.00 and then at the September high of 1,754.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Today’s key near-term Fibonacci support/resistance level: 1,715.00

PIVOT POINT LEVELS FOR DECEMBER NASDAQ:

Pivot:———— 1,720.20
1st Support:—— 1,712.35
2nd Support:—— 1,699.20
1st Resistance:— 1,733.35
2nd Resistance:— 1,741.20

December Dow: Prices hit a fresh contract high overnight. Sell stops likely reside just below support at 9,800 and then more stops just below support at 9,750. Buy stops likely reside just above shorter-term technical resistance at 9,900 and then at 9,950. 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 to bullish early today. Wyckoff’s Intra-Day Market Rating: 6.0

Today’s key near-term Fibonacci support/resistance level: 9,674

PIVOT POINT LEVELS FOR DECEMBER DOW:

Pivot:———— 9,776
1st Support:—— 9,741
2nd Support:—— 9,674
1st Resistance:— 9,843
2nd Resistance:— 9,878

U.S. TREASURY BONDS AND NOTES

U.S. T-Bonds and T-Notes futures are near steady in early trading today. The cash Treasuries market is closed today for the Columbus Day holiday, so trading in futures should be quiet. The bulls faded badly late last week.

December U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical support lies at Friday’s low of 119 20/32 and then at 119 10/32. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 120 16/32 and then at 121 even. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Today’s key near-term Fibonacci support/resistance level: 121 8/32

December U.S. T-Bonds

137 23/32–lifetime high
123 –second pivot point resistance
122 2/32–previous day’s high
121 28/32–9-day moving average
121 27/32–Previous Month’s high
121 21/32–4-day moving average
121 15/32–first pivot point resistance
120 27/32–18-day moving average
120 18/32–pivot point
119 31/32–previous day’s close
119 20/32–previous day’s low
119 1/32–first pivot point support
118 4/32–second pivot point support
117 18/32–previous month’s low
117 10/32–100-day moving average
110 –lifetime low

December U.S. T-Notes: Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Buy stops likely reside just above shorter-term technical resistance at 118.24.0 and then at 119.00.0. Shorter-term moving averages are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Sell stop orders are likely located just below support at Friday’s low of 118.03.0 and then at 118.00.0. Wyckoff’s Intra Day Market Rating: 5.0

Today’s key near-term Fibonacci support/resistance level: 118.26.0

December U.S. T-Notes

125 28/32–lifetime high
119 22/32–second pivot point resistance
119 8/32–previous day’s high
119 2/32–4-day moving average
119 –first pivot point resistance
118 31/32–9-day moving average
118 17/32–pivot point
118 16/32–previous month’s high
118 9/32–previous day’s close
118 5/32–18-day moving average
118 3/32–previous day’s low
117 27/32–first pivot point support
117 12/32–second pivot point support
116 18/32–previous month’s low
115 27/32–100-day moving average
107 3/32–lifetime low

CURRENCIES

The December U.S. dollar index is weaker in early trading today. Bears still have the solid overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 76.84 and then at 77.00. Shorter-term support is seen at 76.00 and then at the contract low of 75.68. Today’s key near-term Fibonacci support/resistance level: 76.48. Wyckoff’s Intra Day Market Rating: 4.0

The December Euro is firmer in early electronic trading. Bulls still have the overall near-term technical advantage. Euro finds sell stop orders are likely located just below technical support at 1.4700 and then at the overnight low of 1.4670. Shorter-term technical resistance for the Euro is seen at last week’s high of 1.4816 and then at the September high of 1.4844. Buy stops likely reside just above those levels. Slow stochastics for the Euro are bullish early today. Today’s key near-term Fibonacci support/resistance level: 1.4708. Wyckoff’s Intra Day Market Rating: 5.5

GOLD

Gold is higher in early dealings today, amid the weaker U.S. dollar. Bulls are still technically strong and looking for more on the upside in the near term. For December gold, shorter-term technical resistance is seen at the overnight high of $1,058.30 and then at last week’s contract and all-time high of $1,062.70. Buy stops likely reside just above those levels. Sell stops likely reside just below support at the overnight low of $1,048.00 and then at $1,037.80. Today’s key near-term Fibonacci support/resistance level: $1,038.00. Wyckoff’s Intra-Day Market Rating: 6.0

CRUDE OIL

Crude oil prices are higher early today. Prices hit a fresh three-week high overnight. In November crude, look for buy stops to reside just above resistance at $73.50 and then just above resistance at $74.00. Look for sell stops just below technical support at the overnight low of $72.05 and then more sell stops just below support at $71.00. Today’s key near-term Fibonacci support/resistance level: $71.17. Wyckoff’s Intra-Day Market Rating: 6.0

GRAINS

Prices were higher in overnight trading. The key “outside markets” are in a bullish posture for grains today, as crude oil prices are higher, the U.S. stock indexes are higher and the U.S. dollar index is weaker. Cold, wet weather in much of the U.S. Corn Belt has and will continue to limit harvest progress, which is bullish for corn and beans.