Monday, March 25–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In an 11th-hour agreement early Monday morning, European Union finance ministers, the International Monetary Fund and the Cyprus government came to terms on a bailout for Cyprus’ financial system that keeps the island nation within the European monetary system. The agreement ensures the depositors with 100,000 Euros or less in the Cyprus banks will keep all their funds. Those with over 100,000 Euros in Cyprus banks are going to take a big hit. Asian, European and U.S. stock markets rose on the Cyprus bailout news, as did the Euro currency, as investor risk appetite has up-ticked to start the new trading week. U.S. economic data due for release Monday includes the Chicago Fed national activity index and midwest manufacturing index, and the Texas manufacturing outlook survey.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today and hit a fresh five-year high overnight. Bulls still have the firm 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 even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,560.30 and then at 1,575.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,549.10 and then at Friday’s low of 1,534.90. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are higher early today and near a six-month high. 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 even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at the March high of 2,817.50 and then at 2,825.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,792.75 and then at 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer early today and hit a fresh all-time record high overnight. Bulls have the solid near-term technical advantage. Sell stops likely reside just below technical support at 14,460 and then at Friday’s low of 14,400. Buy stops likely reside just above technical resistance at 14,550 and then at 14,600. 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower early today on the better investor risk appetite to start the new trading week.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 above the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 143 even and then at the overnight high of 143 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 142 23/32 and then at last week’s low of 142 10/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 June U.S. T-Notes: Prices were lower overnight. Bulls and bears are presently on a level near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are bullish early today. 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 neutral to bearish early today. Shorter-term resistance lies at 131.08.0 and then at the overnight high of 131.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 131.02.5 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The U.S. dollar index is near steady early today, but well up from its early spike low that was hit on the Cyprus bailout agreement. The greenback bulls still have the overall near-term technical advantage, but are now fading. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.660 and then at 83.000. Shorter-term support is seen at 82.2550 and then at the overnight low of 81.835. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

Crude oil prices are firmer early today. Bulls have the slight near-term technical advantage. In May Nymex crude, look for buy stops to reside just above resistance at last week’s high of $94.47 and then at $95.00. Look for sell stops just below technical support at the overnight low of $93.70 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were weaker overnight. Corn and wheat market bulls still have a bit of upside near-term technical momentum, with soybean bulls trying to regain some momentum after posting good gains late last week. Grain traders will scrutinize this morning’s USDA export inspections report. However, traders are looking ahead to Thursday’s USDA planting intentions and quarterly grain stocks reports. The plantings intentions report is one of the most important USDA grain reports of the year. Trading in grain futures markets is likely to be more subdued ahead of Thursday’s batch of important USDA data.