Monday, April 29–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, Italian bond yields fell to a 2.5-year low at the latest 10-year bond auction as investors embraced the new Italian coalition government. A German short-term government debt auction Monday saw funding costs at the lowest level since November, at virtually zero return for the debt buyers. This underscores the keener European investor uncertainty regarding the overall health of the European Union. Euro zone business confidence declined in April, it was reported Monday, in the latest dour economic data coming out of the EU. The European Central Bank holds its monthly meeting on Thursday, with the market place anxiously awaiting its outcome. Many market watchers think the ECB will lower interest rates at Thursday’s gathering. The Federal Reserve on Wednesday will announce its latest monetary policy actions in a busy week of world economic data. U.S. economic data due for release Monday includes personal income and outlays, the Chicago Fed Midwest manufacturing index, pending home sales, and the Texas manufacturing outlook survey.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early today and hovering near the recent all-time 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 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 1,588.00 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 1,574.50 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 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 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 last week’s high of 2,854.50 and then at the April high of 2,858.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,827.50 and then at 2,814.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer early today. Bulls have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at last week’s high of 14,705 and then at 14,750. Sell stops likely reside just below technical support at Friday’s low of 14,625 and then at 14,600. Shorter-term moving averages are neutral early today, as the 4-day moving average is above 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 to bullish 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 some mild profit taking. Bulls still have the solid 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 neutral early today. Shorter-term resistance lies at 149 even and then at last week’s high of 149 6/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 148 17/32 and then at 148 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 June U.S. T-Notes: Prices are near steady early today. Bulls have the solid 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 neutral early today. Shorter-term resistance lies at the contract high of 133.18.0 and then at 133.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.08.0 and then at 133.00.0. 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 lower in early U.S. trading. The bulls still have the overall near-term technical advantage but are now fading and need to show fresh power soon. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.520 and then at Friday’s high of 82.905. Shorter-term support is seen at the overnight low of 82.180 and then at 82.000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today. Bulls still have some upside technical momentum on their side. In June Nymex crude, look for buy stops to reside just above resistance at last week’s high of $93.87 and then at $94.50. Look for sell stops just below technical support at $92.50 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were mostly higher in overnight trading. While there was a short period of drier and warmer weather in the U.S. Corn Belt over the weekend, more substantial rains are in the forecast in the coming days. This will continue to limit corn planting progress and that is bullish for corn. Meantime, the annual hard red winter wheat tour kicks off in the U.S. Plains states this week. The HRW crop is in very bad shape, overall. The grain market bears continue to hold the overall near-term advantage on the charts.