Thursday, March 28–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place has its eyes on Cyprus as banks there opened for business Thursday after an extended closure during the Cypriot banking crisis. There was concern that television cameras focused on Cypriot ATM machines could show long lines of people waiting to withdraw cash–which could in turn spook depositors in banks in other European Union countries. However, as of this writing there were lines at the ATMs in Cyprus, but the overall situation was deemed mostly calm. Also in the European Union, Italian political leaders are meeting Thursday in an effort to form a coalition government after last month’s elections. In mid-April Italians will elect a new president. Developments on this matter will also be watched closely by the market place. More weak economic data came out of Germany Thursday, as the jobless rate rose more than expected in March. European stocks were lower Thursday on the Cyprus and Italy worries, and the weak German economic data, while Italian and Spanish bond yields inched higher. U.S. economic data due for release Thursday includes the weekly jobless claims report, the third-quarter GDP estimate, corporate profits, the ISM Chicago business survey, and the Kansas City Fed manufacturing survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer early yesterday and hovering not far below this week’s five-year high. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early yesterday. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Yesterday, shorter-term technical resistance comes in at Monday’s high of 1,560.30 and then at 1,575.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at the overnight low of 1,549.90 and then at this week’s low of 1,539.20. 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 but not far below the recent six-month high. 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 above the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early yesterday. 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 2,791.50 and then at this week’s low of 2,771.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are firmer early yesterday and hovering not far below this week’s all-time record high. Bulls have the solid near-term technical advantage. Sell stops likely reside just below technical support at 14,445 and then at 13,400. Buy stops likely reside just above technical resistance at this week’s high of 14,488 and then at 14,500. Shorter-term moving averages are bullish early yesterday, as the 4-day moving average is above the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early yesterday. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are slightly lower early yesterday but did hit a three-month high overnight. Bulls now have the slight near-term technical advantage, amid safe-haven demand this week. Shorter-term moving averages (4- 9- 18-day) are bullish early yesterday. 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 early yesterday. Shorter-term resistance lies at the overnight high of 144 31/32 and then at 145 8/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 144 even and then at Wednesday’s low of 143 13/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 June U.S. T-Notes: Prices were slightly lower overnight but did hit another 3.5-month high. Bulls have gained good upside near-term technical momentum this week. Shorter-term moving averages (4- 9- 18-day) are bullish early yesterday. 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 early yesterday. Shorter-term resistance lies at the overnight high of 132.11.0 and then at 132.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.24.0 and then at Wednesday’s low of 131.19.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The U.S. dollar index is weaker early yesterday on profit taking after hitting a 7.5-month high on Wednesday. The greenback bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bullish early yesterday. The dollar index finds shorter-term technical resistance at Wednesday’s high of 83.520 and then at 83.750. Shorter-term support is seen at the overnight low of 83.225 and then at 83.000. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are slightly higher early yesterday and hit a five-week high overnight. Bulls have the near-term technical advantage. In May Nymex crude, look for buy stops to reside just above resistance at $97.00 and then at $97.50. Look for sell stops just below technical support at $96.00 and then at Wednesday’s low of $95.58. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were narrowly mixed overnight. Yesterday’s the day. Grain traders are awaiting Thursday morning’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. Look for very active trading in the grain markets in the aftermath of the 11:00 a.m. CDT USDA data. The corn futures have seen limit daily price moves in the immediate aftermath of some of the recent quarterly USDA reports. The USDA data Thursday is likely to set the tone for the grain futures market prices for the coming weeks–until U.S. Corn Belt weather patterns start to dominate.
