* LATEST MARKET DEVELOPMENTS *
Traders are still digesting the Federal Reserve’s Open Market Committee minutes from early January, which said U.S. economic conditions are improving to the point that some FOMC members think its massive asset purchasing program (quantitative easing) may have to be changed soon. The FOMC will further address the issue at its next meeting in March. It can be argued, and many market analysts are saying, that some markets over-reacted to the FOMC minutes. First, there was not at all a consensus among the FOMC members on whether to end the asset purchase program sooner rather than later. And if the Fed does indeed target the unemployment rate for its monetary policy decisions, the easy money policy of the central bank likely won’t end any time soon. Fed Chairman Bernanke also remains firmly in the dovish monetary policy camp, most agree. European stocks and the Euro currency slumped Thursday, following the lead of the U.S. markets Wednesday afternoon. European stocks were also hurt by disappointing Euro zone purchasing managers’ data from Markit that was released Thursday. That data suggests the Euro zone is still in overall economic contraction in the first quarter. Asian stock markets were also weaker Thursday, following the release of the U.S. FOMC minutes. China’s stock market dropped sharply Thursday after Chinese officials reiterated it wants to keep domestic property prices in check–which could mean tighter monetary policy in the near future. China’s central bank also made a large withdrawal of cash from the banking system this week, in an effort to keep price inflation in check. U.S. economic data due for release Thursday includes the weekly jobless claims report, the consumer price index, the flash manufacturing PMI, existing home sales, leading economic indicators, the weekly DOE liquid energy stocks report, and the Philadelphia Fed business outlook survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early today on follow-through selling from Wednesday. A weaker close today would
produce a bearish “key reversal” down on the daily bar chart, which would be one clue that a market top is in place. But right now the bulls still have the overall near-term technical advantage. 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 resistance comes in at the overnight high of 1,509.60 and then at 1,521.80. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,500.00 and then at the February low of 1,490.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are lower in early trading as the bulls are fading. Bulls do still have the overall near-term technical advantage. 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 resistance is located at the overnight high of 2,741.00 and then at 2,750.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the February low of 2,709.00 and then at 2,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
Dow futures: Prices are weaker today on profit taking after hitting a five-year high on Wednesday. A weaker close today
would produce a bearish “key reversal” down on the daily bar chart, which would be one clue that a market top is in place. But right now the bulls still have the overall near-term technical advantage. Sell stops likely reside just below technical support at the February low of 13,805 and then at 13,750. Buy stops likely reside just above technical resistance at 14,000 and then at Wednesday’s high of 14,035. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-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: 4.5
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are higher early today on short covering in a bear market. Bears still have the overall near-term technical advantage. 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 bullish early today. Shorter-term resistance lies at the overnight high of 143 27/32 and then at 144 even. Buy stops
likely reside just above those levels. Shorter-term technical support lies at 143 16/32 and then at the overnight low of 143 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
March U.S. T-Notes: Prices are higher early today on short covering in a bear market. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. 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 bullish early today. Shorter-term resistance lies at the overnight high of 131.26.0 and then at the February high of 131.29.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.26.0 and then at 131.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The March U.S. dollar index is solidly higher early today and hit a fresh three-month high. The greenback bulls are showing solid power to suggest a market bottom is in place and that prices can continue to trend higher in the near term. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 81.62 and then at the November high of 81.70. Shorter-term support is seen at the
overnight low of 81.12 and then at 80.99. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
Crude oil prices are solidly lower early today and hit a fresh six-week low overnight. Bulls are fading badly amid the very strong U.S. dollar index. In April Nymex crude, look for buy stops to reside just above resistance at $94.00 and then at $95.00. Look for sell stops just below technical support at the overnight low of $93.52 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were mostly weaker overnight. The grain markets are now feeling pressure from the overall selling seen in the raw commodity market sector, with crude oil and gold leading the downside price action. The strong resurgence in the value of the U.S. dollar recently is also a bearish factor for the grain futures markets.
