Tuesday, April 23–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news there was weak German manufacturing data released Tuesday that bolsters arguments the European Central Bank will lower interest rates at next week’s ECB policy meeting. Markit’s German purchasing managers index fell to 48.8 in April from 50.6 in March. The German data pushed the Euro currency to a two-week low. There was also weaker-than-expected manufacturing data coming out of China Tuesday. The HSBC purchasing managers’ index came in at 50.5 in April versus 51.6 in March. Asian stock markets dropped on the China news. The German and China data also added selling pressure to the raw commodity sector, including the precious metals markets. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P/Case-Shiller home price index, the ISM Chicago business survey, the ISM semiannual report on business and the economy, and the consumer confidence index.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today. 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 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 1,570.00 and then at last week’s high of 1,582.80. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,548.80 and then at Monday’s low of 1,542.80. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher early today. 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 bullish early today. Shorter-term technical resistance is located at Monday’s high of 2,812.50 and then at 2,823.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,785.00 and then at Monday’s low of 2,770.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today. Bulls have the overall near-term technical advantage. Sell stops likely reside just below technical support at 14,500 and then at 14,450. Buy stops likely reside just above technical resistance at 14,605 and then at 14,650. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day and 18-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: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are higher early today and hit a fresh five-month high overnight. Bulls have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 bullish early today. Shorter-term resistance lies at 149 even and then at the overnight high of 149 6/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 148 16/32 and then at the overnight low of 148 4/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5 June U.S. T-Notes: Prices are higher early today and hit a fresh contract high overnight. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still 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 to bullish early today. Shorter-term resistance lies at the overnight contract high of 133.15.5 and then at 133.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.02.5 and then at 133.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

U.S. DOLLAR INDEX

The U.S. dollar index is higher in early U.S. trading and hit a two-week high overnight. The bulls have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.180 and then at 83.420. Shorter-term support is seen at the overnight low of 82.650 and then at 82.500. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bears have the near-term technical advantage. A big and bearish pennant pattern may be forming on the daily bar chart. In June Nymex crude, look for buy stops to reside just above resistance at $89.00 and then at Monday’s high of $89.48. Look for sell stops just below technical support at $88.00 and then at Monday’s low of $87.69. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed overnight. The key “outside markets” are bearish for the grains early Tuesday, as the U.S. dollar index is higher and crude oil prices are weaker. Recent moisture in the U.S. Corn Belt and Plains states is a bearish factor for grains, even though it has caused early corn-planting delays. However, there is drier weather forecast for the U.S. Corn Belt later this week. The grain market bears continue to hold the near-term advantage on the charts.