* LATEST MARKET DEVELOPMENTS *
The Dow and S&P 500 stock index futures on Thursday saw significantly technically bearish “key reversals” down confirmed on the daily bar charts for both indexes, following the bearish “outside day” down price action on the daily charts for both on Wednesday. Key reversals down are an early technical clue that the Dow and S&P 500 have put in at least near-term market tops. Another bearish clue that the U.S. stock market is headed for some leaner times just ahead is that the copper futures market has been hammered lower this week. History shows that the red industrial metal can be a leader of significant price movements in the stock market. In overnight news, the Euro currency hit a fresh six-week low against the U.S. dollar overnight, on fresh disappointing European Union economic news. The European Central Bank said European banks are repaying long-term refinancing loans from the ECB at a slower rate than expected, which led to ideas the ECB will not be tightening its monetary policy any time soon. Also on Friday the European Commission forecast the EU economy will contract (by 0.3%) for a second year in a row in 2013. The unemployment rates in Greece and Spain are forecast at 27% in 2013, with Portugal coming in at 17%. The aforementioned news overshadowed news that German business confidence increased in February. German bunds also rallied Friday on the generally downbeat data coming out of the EU. There is also uncertainty among European investors regarding the upcoming Italian elections that begin this weekend. Next week’s Italian government bond auctions will be a key barometer of investor sentiment toward Italy following the elections. After a brief period of better economic data
coming out of the European Union, just recently the EU economic data has turned more downbeat. St. Louis Federal Reserve President James Bullard said on CNBC Friday morning that the Fed’s monetary policy will remain “easy” for a “long time.” However, he added that global economic uncertainty has decreased. Bullard’s remarks did work to ease concerns in the market place that the Federal Reserve will begin to back off on its easy money policies sooner rather than later. There is no major U.S. economic data due for release Friday.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are higher early today. 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 neutral early today. Today, shorter-term technical resistance comes in at 1,521.80 and then at this week’s high of 1,530.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,495.70 and then at the February low of 1,485.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are firmer in early trading. Bulls 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 and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at Thursday’s 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 overnight low of 2,716.00 and then at Thursday’s low of 2,699.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
Dow futures: Prices are firmer today. The bulls still have the overall near-term technical advantage. Sell stops likely reside just below technical support at 13,880 and then at 13,850. Buy stops likely reside just above technical resistance at 13,970 and then at 14,000. 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: 5.5
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are weaker early today. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 143 28/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 143 16/32 and then at Thursday’s low of 143 3/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
March U.S. T-Notes: Prices are weaker early today. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 131.31.5 and then at 132.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.20.0 and then at Thursday’s low of 131.14.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly lower early today but is hovering near a three-month high. The greenback bulls have shown solid power recently to suggest a market bottom is in place and that prices can 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 Thursday’s high of 81.62 and then at the November high of 81.70. Shorter-term support is seen at the overnight low of 81.26 and then at 81.12. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are slightly higher early today and seeing tepid short covering following the recent steep sell off. Prices Thursday hit a six-week low. Bulls are fading amid the very strong U.S. dollar index. In April Nymex crude, look for buy stops to reside just above resistance at the overnight high of $93.48 and then at $94.00. Look for sell stops just below technical support at Thursday’s low of $92.63 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
Markets were higher overnight on short covering and bargain hunting. The grain markets had been feeling pressure from the overall selling seen in the raw commodity market sector this week, with crude oil and gold leading the downside price action. Also, there are bearish price and production forecasts for the grains coming out of the annual USDA Ag Outlook conference presently taking place. My bias is that there is still some near-term price pressure to come in the grains, but I am not longer-term bearish.
