This is a feature item to provide you, my valued reader, with a quick analytical "snapshot" of the U.S. financial, currency and stock index futures markets that most interest you. In a short paragraph I'll tell you if I'm bullish, bearish or neutral the market, and why.
U.S. T-BONDS. (December) Neutral. September has been a very bad month for the bulls, so far. A Solid 3.5-month uptrend line on the daily bar chart was soundly negated last week. Shorter-term moving averages (9- and 18-day) have flashed sell signals. The powerful Directional Movement Index (DMI) shows the uptrend has fizzled out. Still, the monthly continuation chart for nearby futures shows the market in a steep uptrend for all of this year. And longer-term, prices have been trending generally higher for several years. For the bulls to get back in the ballgame nearterm, they need to push prices back above par, basis the Dec. Good support does not surface on the daily bar chart until the 96.16 area.
S&P 500 FUTURES. (December) Neutral. December S&P 500 futures continue to experience a rollercoaster ride that has been going on since late spring. Bears have taken near-term control of the market and are looking to push prices down to the solid support area around 1446. Look for more broad, choppy activity in the near future. It will take a move above 1560 to turn me neutral-friendly, and a move above 1598 to turn me outright bullish. A move below 1444 turns me neutral-negative, and a move below 1390 turns me outright bearish. The longer-term monthly bar chart remains bullish, as prices have been in a strong uptrend since early 1995.
DOW FUTURES. (December) Neutral. This index had a nice run higher during the month of August, but then backed off when prices touched resistance at the 11,565 area. I'll turn neutral-friendly if prices can push above the 11,565 area. I'll turn outright bullish if prices can push above the April high around 11,800. There's not much price history on the monthly futures chart, but the chart is showing prices in a strong uptrend. I'll turn outright bearish if prices drop below the summertime low around 10,575.
EURO CURRENCY. (December) Bearish. This currency is in a swoon, hitting new lows this week. The longer-term charts are also bearish. Bottom-pickers beware: I've been involved with the forex market for many years, and I've noticed the trends in the major currencies tend to last longer than in the commodities. Thus, we could see still more downside in the Euro, even though it seems prices are already at very low levels.
BRITISH POUND. (December) Bearish. This market also hit new lows last week, and is also in a longer-term downtrend. Same situation as the Euro currency.
SWISS FRANC. (December) Bearish. On the daily bar chart, downtrend is in place since mid-June, with new lows scored recently. On the longer-term monthly continuation chart for nearby futures, the Swissy has been in a downtrend since early 1995.
CANADA DOLLAR. (December) Neutral. This market has chopped sideways since June. The bears have had the advantage for the month of September. Stiff support lies at the .6715 area. I'll turn neutral-friendly if prices can push above .6870. I'll turn bullish if prices can push above the late-March, early-April high around .6950. I'll turn neutral-bearish if prices drop below the support area at .6715. I'll turn outright bearish if prices drop below the June low around .6640.
AUSTRALIAN DOLLAR. (December) Bearish. Prices dipped to a new yearly low again this week, and have slipped below the 1998 low of .5465. Don't fight the trend and try and pick a bottom.
JAPANESE YEN. (December) Neutral. This market is in a two-week downtrend after enjoying a month-long uptrend. Trade is choppy. Still, bears have the advantage both on a short-term and long-term basis. A move above .9925 turns me friendly to the market and a move above the April high around 1.0050 turns me outright bullish. The monthly bar chart for nearby futures shows a symmetrical triangle pattern developing. These patterns are usually continuation patterns. Given that the trend on the monthly chart has been up since mid-1998, odds favor an upside breakout from this triangle pattern.
That's it for this week. Also, for those of you who don't already know, I am going to soon begin publishing two newsletters on the futures markets outlooks. One will focus on markets that trade inside the U.S. borders, and the other will focus on major markets that trade outside U.S. borders, such as the bund, the long gilt, the CAC and the Notional. Please check out my personal website at http://www.angelfire.com/ia2/jimwyckoff
Make sure to drop me an email to say hi. I enjoy receiving email from my readers all over the world.
Jim Wyckoff (jwyckoff@futuresource.com)
