Thursday, April 11–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, Philadelphia Federal Reserve Bank President Charles Plosser said in a speech in Tokyo the Fed should start winding down its bond-buying program (quantitative easing) and be completely done with it by the end of the year. Plosser is not a voting member of the Federal Open Market Committee. The FOMC minutes released Wednesday showed Fed officials are debating on when to shut the bond-buying program down. This situation as rattled commodity market bulls. The QE of the past few years had helped drive many commodity market prices to record highs. The Japanese stock market hit a four-year high overnight in the wake of the recent aggressive monetary easing by the Bank of Japan. The U.S. dollar hit a four-year high versus the yen overnight as the BOJ works to devalue its currency. The European Central Bank has also hinted it may further lower its interest rates in an effort to devalue its currency. Many wonder if the U.S. Federal Reserve will back off on monetary easing when other major central banks of the world are stepping harder on their easy-money accelerators to reinvigorate their economies. U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export price indexes, and ICSC chain store sales trends.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly higher early yesterday and hit another five-year high overnight. Futures prices are near their all-time record high, too. Bulls have the solid 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 the all-time high of 1,586.50 and then at 1,600.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at 1,575.00 and then at 1,568.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are weaker early yesterday on profit taking after hitting a six-month high Wednesday. Bulls still have the 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early yesterday. Shorter-term technical resistance is located at Wednesday’s high of 2,857.50 and then at 2,875.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,823.00 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

Dow futures: Prices are firmer early yesterday and hovering near this week’s all-time high. Bulls have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at 14,700 and then at Wednesday’s low of 14,660. Buy stops likely reside just above technical resistance at Wednesday’s high of 14,760 and then at 14,800. 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 to bearish early yesterday. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are near steady early yesterday. Bulls still have the overall near-term technical advantage but are fading and need to show fresh power soon. Shorter-term moving averages (4- 9- 18-day) are still 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 to bearish early yesterday. Shorter-term resistance lies at the overnight high of 146 9/32 and then at Tuesday’s high of 146 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 145 26/32 and then at 145 16/32. 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 yesterday. Bulls still have the near-term technical advantage but are fading a bit. 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 bearish early yesterday. Shorter-term resistance lies at the overnight high of 132.18.0 and then at Wednesday’s high of 132.27.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.10.5 and then at 132.00.0. 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 solidly lower in early U.S. trading and hit a fresh three-week low. The greenback bulls are fading and need to show fresh power soon. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at 82.500 and then at the overnight high of 82.680. Shorter-term support is seen at the overnight low of 82.140 and then at 82.000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are slightly lower early yesterday. Bulls are having a good week. Bulls and bears are on a level near-term technical playing field. In May Nymex crude, look for buy stops to reside just above resistance at Wednesday’s high of $94.82 and then at $95.00. Look for sell stops just below technical support at $94.00 and then at Wednesday’s low of $93.40. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed overnight. Traders have quickly moved past Wednesday’s monthly USDA supply and demand report. Wet, cold weather in the U.S. Midwest is supporting the bullish camp in corn, due to ideas of planting delays, even though soil moisture profiles in the Corn Belt continue to improve. Soybeans are seeing a bit of pressure on notions some intended corn acres could switch to soybeans due to the wet weather. Meantime, freezing weather in the U.S. Plains states this week is supporting buying interest in wheat futures due to worries of frost or freeze damage to the wheat crop. Traders will closely examine Thursday morning’s weekly USDA export sales report.