Monday, May 6–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, London was closed for a public holiday, which made for quieter dealings in the foreign exchange market. The European Union overall purchasing managers’ index declined in April, but by less than forecast by economists. However, the German economy, the largest in the EU, is showing weakness. The Markit composite PMI for the EU came in at 46.9 in April from 46.5 in March. A reading below 50.0 shows contraction in business activity. Israeli missile inside Syrian territory over the weekend have attracted the attention of the market place. Any escalation in that situation would likely prompt keener risk aversion in the world market place. U.S. economic data due for release Monday is light and includes the employment trends index.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early today after hitting a new all-time high on Friday. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at Friday’s record high of 1,614.20 and then at 1,625.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,600.00 and then at Friday’s low of 1,589.70. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early today. Bulls still have the solid overall near-term technical advantage after prices hit a new 12-year high Friday. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is located at Friday’s high of 2,947.75 and then at 2,950.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,925.00 and then at Thursday’s low of 2,901.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are near steady early today after hitting a new record high on Friday. Bulls still have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Friday’s high of 14,955 and then at 15,000. Sell stops likely reside just below technical support at 14,850 and then at 14,800. Shorter-term moving averages are bullish early today, as the 4-day moving average is above 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are near steady early today after taking a beating on Friday and dropping to a fresh three-week low. Bulls are now in near-term technical trouble. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-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 147 8/32 and then at 147 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at Friday’s low of 146 27/32 and then at 146 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 June U.S. T-Notes: Prices are near steady early today. Bulls are now fading after heavy losses suffered Friday. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-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 132.30.0 and then at 133.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.24.5 and then at 132.20.0. 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 slightly higher in early U.S. trading. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.300 and then at 82.415. Shorter-term support is seen at the overnight low of 82.040 and then at Friday’s low of 81.835. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today and did hit a fresh four-week high overnight. Bulls have regained upside momentum. In June Nymex crude, look for buy stops to reside just above resistance at last week’s high of $96.04 and then at $96.50. Look for sell stops just below technical support at the overnight low of $95.56 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were lower in overnight trading, led by corn. The U.S. Corn Belt did not see the weekend expectations for heavier rains in the region pan out, and the extended forecast now calls for drier and warmer weather. Thus, it appears a big chunk of the Corn Belt corn crop will get planted in the coming days. That’s bearish for corn, and corn is presently the leader in the grains complex. Soybeans and wheat will follow the corn futures market early this week. Traders will closely examine Monday morning’s weekly USDA export inspections report.