Friday, November 27, 2009

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OVERNIGHT/EARLY MORNING DEVELOPMENTS

The market feature in overnight/early morning trading today is a worldwide equity market sell off following reports that the country of Dubai is unable to make some debt payments.

JIM’S MARKET THOUGHT OF THE DAY *

Those looking for a quieter, low-volume trading day in the markets on Friday were met with a big surprise this morning when they looked at their price screens. The markets are very active on the Dubai debt crisis news. The Dubai news can be considered the latest unexpected “market shock” in the ongoing world economic recession. How big and lasting this market shock will be has yet to be determined. However, by looking at the markets’ behavior this morning, this shock does look to be not insignificant. Interestingly, the U.S. dollar has seen solid strength this morning on the worldwide market uncertainty. Funny thing how traders will beat the U.S. dollar down and beat it down some more, amid rhetoric that the greenback has seen its best days gone by. Yet, when an unexpected and significant shock hits the markets, traders still favor holding greenbacks. The action in the U.S. dollar index on Friday is one early solid clue that the U.S. dollar index has finally put in a major market low. –Jim

U.S. STOCK INDEXES

The U.S. stock indexes are solidly lower in early morning trading today, on the Dubai news. The indexes appear headed for bearish weekly low closes today. Many veteran traders and analysts are suspecting a profit-taking pullback in the stock indexes as the year winds down.

December S&P 500: 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 is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical support comes in at 1,075.00 and then at the overnight low of 1,066.90. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at 1,090.00 and then at 1,100.00. Buy stops are likely located just above those levels. Wyckoff’s Intra-day Market Rating: 3.0

Today’s key near-term Fibonacci support/resistance level: 1,079.00.

December Nasdaq Index: 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 bearish early today. Shorter-term technical support is located at 1,740.00 and then at the overnight low of 1,723.50. Sell stops likely reside just below those levels. On the upside, short-term resistance is seen at 1,775.00 and then at the overnight high of 1,793.75. Buy stops are likely located just above those levels. Wyckoff’s Intra-Day Market Rating: 3.0

Today’s key near-term Fibonacci support/resistance level: 1,752.00

December Dow: Sell stops likely reside just below support at 10,200 and then more stops just below support at 10,150. Buy stops likely reside just above technical resistance at 10,250 and then at 10,300. Shorter-term moving averages are still 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 3.0

Today’s key near-term Fibonacci support/resistance level: 10,342

U.S. TREASURY BONDS AND NOTES

U.S. T-Bonds and T-Notes futures are higher in early trading today, on a flight to quality amid the Dubai debt crisis. Prices hit fresh seven-week highs overnight. Bulls have the solid overall near-term technical advantage in T-Bonds and T-Notes.

December U.S. T-Bonds: 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 technical support lies at the overnight low of 122 8/32 and then at 122 even. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at 123 even and then at the overnight high of 123 18/32. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 6.5

Today’s key near-term Fibonacci support/resistance level: 122 7/32

December U.S. T-Bonds

137 23/32–lifetime high
123 25/32–Previous Month’s high
123 7/32–second pivot point resistance
122 23/32–first pivot point resistance
122 16/32–previous day’s high
122 6/32–previous day’s close
121 31/32–pivot point
121 15/32–first pivot point support
121 12/32–4-day moving average
121 8/32–previous day’s low
120 29/32–9-day moving average
120 23/32–second pivot point support
119 27/32–18-day moving average
118 27/32–100-day moving average
117 25/32–previous month’s low
110 –lifetime low

December 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 121.15.0 and then at the overnight high of 120.21.5. Shorter-term moving averages are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Sell stop orders are likely located just below support at the overnight low of 120.16.5 and then at 120.00.0. Wyckoff’s Intra Day Market Rating: 6.5

Today’s key near-term Fibonacci support/resistance level: 120.23.0

December U.S. T-Notes

125 28/32–lifetime high
121 –second pivot point resistance
120 24/32–first pivot point resistance
120 19/32–previous day’s high
120 15/32–previous day’s close
120 10/32–pivot point
120 2/32–first pivot point support
119 30/32–4-day moving average
119 29/32–previous month’s high
119 29/32–previous day’s low
119 22/32–9-day moving average
119 20/32–second pivot point support
119 2/32–18-day moving average
117 8/32–100-day moving average
116 28/32–previous month’s low
107 3/32–lifetime low

CURRENCIES

The December U.S. dollar index is solidly higher in early trading today, on a flight to quality into the U.S. currency. Prices are headed for a bullish weekly high close today, which would be one early clue that a near-term market bottom is in place. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 75.66 and then at 75.84. Shorter-term support is seen at the overnight low of 74.97 and then at 74.50. Today’s key near-term Fibonacci support/resistance level: 75.64. Wyckoff’s Intra Day Market Rating: 6.0

The December Euro is sharply lower in early electronic trading and is heading for a bearish weekly low close. Bulls still have the overall near-term technical advantage. Euro finds sell stop orders are likely located just below technical support at the overnight low of 1.4827 and then at 1.4799. Shorter-term technical resistance for the Euro is seen at 1.4950 and then at 1.5000. 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: 1.4821. Wyckoff’s Intra Day Market Rating: 3.0

GOLD

Gold is solidly lower in early dealings today, on a profit-taking pullback from recent strong gains and amid the stronger U.S. dollar. Today’s market action clearly shows that gold is no longer a “safe-haven” asset when serious worldwide uncertainty hits the markets. Gold appears headed for a bearish weekly low close that would be one early clue that a near-term market top is in place. For December gold, shorter-term technical resistance is seen at $1,165.00 and then at $1,175.00. Buy stops likely reside just above those levels. Sell stops likely reside just below support at $1,150.00 and then at $1,140.00. Today’s key near-term Fibonacci support/resistance level: $1,131.00. Wyckoff’s Intra-Day Market Rating: 3.0

CRUDE OIL

Crude oil prices are sharply lower early today and hit a fresh six-week low overnight. Serious near-term chart damage has been inflicted today to suggest a market top is in place. In January crude, look for buy stops to reside just above resistance at $75.00 and then just above resistance at $76.00. Look for sell stops just below technical support at the overnight low of $72.39 and then more sell stops just below support at $72.00. Today’s key near-term Fibonacci support/resistance level: $72.39. Wyckoff’s Intra-Day Market Rating: 2.5

GRAINS

Prices were solidly lower in overnight trading. The key outside markets are still the main drivers of the grain markets, and those markets are in a fully bearish posture early today: a solidly higher U.S. dollar and sharply lower U.S. stock indexes and crude oil prices. The grains appear headed for technically bearish weekly low closes today.