Tuesday, November 20–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, the market place showed little reaction to a move by credit rating agency Moody’s to downgrade France’s sovereign credit rating. Given other major countries have also been downgraded the past couple years, and the fact that the credit rating agencies, themselves, have seen their own credibility eroded, the market place just yawned at the news. There is a meeting of Euro zone officials in Brussels on Tuesday on when to disburse the next tranche of bailout money to Greece, and on what terms Greece will be held in order to receive the money. It’s widely expected Greece will get the bailout money, as the EU doesn’t have much choice if the bloc wants the financially troubled EU country to stay afloat and stay in the union. Spanish and Italian bond yields have been stable to falling, which hints the EU debt crisis is at least not worsening at present. Traders and investors continue to keep one eye on the simmering situation between Israel and Hamas. Any further escalation in that situation could drive oil prices higher and see fresh flight-to-safety buying of gold, the U.S. dollar and U.S. Treasuries. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction. Fed Chairman Bernanke gives a speech in New York.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early yesterday. Bears still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are still bearish early yesterday. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Yesterday, shorter-term technical resistance comes in at 1,393.00 and then at 1,400.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at 1,363.70 and then at 1,350.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early yesterday. The shorter-term moving averages (4- 9-and 18-day) are still bearish early yesterday. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Shorter-term technical resistance is located at Monday’s high of 2,594.25 and then at 2,600.00. Buy stops likely reside just above those levels. On thedownside, short-term support is seen at 2,575.00 and then at 2,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are slightly lower early yesterday. Sell stops likely reside just below technical support at 12,700 and then at Monday’s low of 12,640. Buy stops likely reside just above technical resistance at Monday’s high of 12,755 and then at 12,800. Shorter-term moving averages are bearish early yesterday, as the 4-day moving average is below the 9-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are weaker early yesterday and are seeing more profit taking. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is even with the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at the overnight high of 151 23/32 and then at Monday’s high of 151 31/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 151 1/32 and then at 150 19/32. 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 yesterday on more profit taking. Shorter-term moving averages (4- 9- 18-day) are still bullish early yesterday. 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 yesterday. Shorter-term resistance lies at the overnight high of 134.00.5 and then at Monday’s high of 134.04.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 133.22.0 and then at 133.16.0. 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 slightly higher in early U.S. trading yesterday, on a corrective bounce from Monday’s selling pressure. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at the overnight high of 81.05 and then at Monday’s high of 81.28. Shorter-term support is seen at Monday’s low of 80.83 and then at 80.68. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early yesterday on a corrective pullback from solid gains scored on Monday. The Middle East tensions will continue to limit selling pressure in crude. In January Nymex crude, look for buy stops to reside just above resistance at $90.00 and then at $91.00. Look for sell stops just below technical support at $88.00 and then at $87.50. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed in overnight trading. Expect quieter trading conditions the rest of the week due to the U.S. Thanksgiving holiday on Thursday. Near-term chart damage has been inflicted in soybean, corn and wheat futures recently. My bias is still that there is not strong downside price pressure left in corn and soybeans.