Friday, March 22–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The Cyprus financial crisis continues to fester and the market place remains uneasy about it. Russia had indicated it could bail out Cyprus, but reports said talks between Russian and Cyprus officials have ended without any agreement. A second vote on a financial bailout plan by the Cyprus parliament is scheduled for Friday. This plan would involve bank restructuring and placing restrictions on financial transactions. The European Central Bank says it has funds ready for a Cyprus bailout, but insists there needs to be an EU-backed financial plan in place by Monday. There is now talk of Cyprus being booted out of the European Monetary Union. The market place will head into the weekend with keener uncertainty. There was more weak European Union economic data released Friday, and it came from the strongest country in the EU. German business confidence showed a surprising drop in March after rising sharply in February. The Ifo business confidence index dropped to 106.7 in March from 107.4 in February. The Euro zone remains mired in economic recession, which along with the Cyprus financial crisis has pushed the EU problems back to the front burner of the market place. This has benefitted safe-haven assets such as the U.S. dollar, U.S. Treasuries and gold. There is no major U.S. economic data due for release Friday.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early yesterday. Bulls still have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early yesterday. 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 to bearish early yesterday. Yesterday, shorter-term technical resistance comes in at Thursday’s high of 1,550.50 and then at last week’s high of 1,558.60. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at this week’s low of 1,529.60 and then at 1,520.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early yesterday. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early yesterday. 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 neutral to bearish early yesterday. Shorter-term technical resistance is located at Thursday’s high of 2,786.50 and then at 2,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,765.25 and then at this week’s low of 2,749.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early yesterday. Bulls have the solid near-term technical advantage. Sell stops likely reside just below technical support at 14,360 and then at Thursday’s low of 14,320. Buy stops likely reside just above technical resistance at Thursday’s high of 14,414 and then at the record high of 14,470. Shorter-term moving averages are neutral early yesterday, 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 yesterday. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early yesterday on some safe-haven demand heading into an uncertain weekend. Bears still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Shorter-term resistance lies at the overnight high of 143 31/32 and then at 144 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 143 16/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 June U.S. T-Notes: Prices were firmer overnight on safe-haven demand. Bulls and bears are presently on a level near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early yesterday. Shorter-term resistance lies at the overnight high of 131.21.5 and then at this week’s high of 131.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.08.0 and then at this week’s low of 131.02.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The U.S. dollar index is weaker yesterday on some profit taking. The greenback 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 82.985 and then at Thursday’s high of 83.185. Shorter-term support is seen at 82.500 and then at this week’s low of 82.625. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are firmer early yesterday. Bulls and bears are back on a level near-term technical playing field. In May Nymex crude, look for buy stops to reside just above resistance at Thursday’s high of $93.53 and then at $94.00. Look for sell stops just below technical support at the overnight low of $92.33 and then at this week’s low of $91.84. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were weaker overnight. Corn and wheat market bulls still have some upside near-term technical momentum, with soybean bulls trying to regain some momentum after posting good gains Thursday. Grain traders are looking ahead to next week’s USDA planting intentions report, which is one of the most important USDA grain reports of the year.