Thursday, April 25–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Gold is trading sharply higher in early U.S. trading today. It is my bias that the majority of the raw commodity sector is now looking to gold for direction. If gold prices have indeed put in a market bottom, then it’s likely other raw commodity markets have done the same. The International Monetary Fund reported overnight that Russia, Turkey and other Asian nations increased their official gold reserves in March. The report did not include the timeframe in April when the big downdraft in prices occurred. The May IMF report will be very closely scrutinized to see how central banks responded to the big sell off in gold prices in April.In other overnight news, Spain’s unemployment rate rose to a record high of 27.2% in the first quarter. It was also reported that Spain’s gross domestic product contracted at an annual rate of 2% in the first quarter. U.S. economic data due for release Thursday includes the weekly jobless claims report and the Kansas City Fed manufacturing survey.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today. Bulls have the solid 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 above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at last week’s high of 1,582.80 and then at the April high of 1,592.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,571.00 and then at 1,560.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today. Bulls have the solid 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 above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is located at this week’s high of 2,843.50 and then at 2,850.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,814.00 and then at 2,800.00. 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 solid overall near-term technical advantage. Sell stops likely reside just below technical support at Wednesday’s low of 14,605 and then at 14,550. Buy stops likely reside just above technical resistance at 14,700 and then at 14,750. Shorter-term moving averages are bearish early today, as the 4-day moving average is below the 9-day and 18-day. The 9-day moving average is below 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 weaker early today on mild profit taking. Bulls still 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 bearish early today. Shorter-term resistance lies at Wednesday’s high of 148 9/32 and then at 148 20/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 147 26/32 and then at this week’s low of 147 15/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 June U.S. T-Notes: Prices are weaker early today on mild profit taking. Bulls 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 133.04.5 and then at 133.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Wednesday’s low of 132.28.0 and then at this week’s low of 132.24.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The U.S. dollar index is solidly lower in early U.S. trading, on profit taking. The bulls have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at 83.815 and then at the overnight high of 83.055. Shorter-term support is seen at 82.500 and then at this week’s low of 82.400. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today and hit a fresh two-week high overnight. Bulls have regained upside technical momentum following Wednesday’s strong gains. In June Nymex crude, look for buy stops to reside just above resistance at $92.00 and then at $92.50. Look for sell stops just below technical support at $91.00 and then at $90.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were higher overnight on short covering. The key “outside markets” are mildly bullish for the grains early Wednesday, as the U.S. dollar index is solidly lower and crude oil prices are slightly higher. Traders will closely scrutinize Thursday morning’s weekly USDA export sales report. 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 and warmer weather forecast for the U.S. Corn Belt later this week. The grain market bears continue to hold the overall near-term advantage on the charts.