* LATEST MARKET DEVELOPMENTS *
The Ukrainian president was ousted during the weekend and is now in hiding. The situation there remains very fluid. If that situation sees violence escalate, more risk aversion would enter the market place. The Ukrainian developments and some civil unrest and violence in Thailand are prompting increased safe-haven demand for gold.
There was a Group of 20 economic and finance ministers meeting in Sydney, Australia, during the weekend. The group laid out a plan for the major industrial economies to continue with their aggressive monetary stimulus plans, while at the same time called for the emerging countries to restructure their economies to contain inflation. The proclamation was mostly ignored by world markets.
Asian and European stock markets were pressured Monday in part on reports Chinese banks have ratcheted back lending to commercial property developers. Traders and investors have become more concerned about slowing economic growth in China the past few months. China is the world’s second-largest economy and the world’s largest consumer of raw commodities.
In other news overnight, the European Union saw its consumer price index fall at the largest rate since EU records began in 2001—down 1.1% in January, month-on-month. This report intensifies worries about deflationary price pressures in the European Union and puts more pressure on the European Central Bank to add more monetary stimulus. There was an upbeat German Ifo business confidence report released Monday.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
Wyckoff’s Daily Risk Rating: 6.0 (The violence in Ukraine and now Thailand is keeping some increased risk in the market place.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are firmer in early U.S. trading. The bulls still have the solid overall near-term technical advantage as prices hover not far below the record high. 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 the all-time high of 1,846.50 and then at 1,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,830.00 and then at last week’s low of 1,817.60. 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 upside near-term technical momentum as prices hover near a 13.5-year high. 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 early today. Shorter-term technical resistance is located at last week’s high of 3,686.75 and then at 3,700.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,655.00 and then at last week’s low of 3,638.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
Dow futures: Prices are firmer in early U.S. trading. Bulls have the overall near-term technical advantage. Buy stops likely reside just above technical resistance at 16,150 and then at last week’s high of 16,195. Sell stops likely reside just below technical support at Friday’s low of 16,080 and then at 16,000. 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
March U.S. T-Bonds: Prices are slightly firmer early today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 133 10/32 and then at 133 15/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133 even and then at 132 20/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 March U.S. T-Notes: Prices are slightly lower early today. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term resistance lies at the overnight high of 125.24.0 and then at 126.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 125.08.5 and then at the February low of 125.03.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The March U.S. dollar index is slightly higher early today on more short covering. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 80.465 and then at 80.600. Shorter-term support is seen at the overnight low of 80.125 and then at last week’s low of 79.950. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
April Nymex crude oil prices are near steady early today. Bulls still have near-term technical momentum. A steep seven-week-old uptrend is in place on the daily bar chart. A bull flag has also formed on the daily chart. In April Nymex crude, look for buy stops to reside just above resistance at the overnight high of $102.70 and then at the contract high of $103.29. Look for sell stops just below technical support at $102.00 and then at Friday’s low of $101.69. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were mixed overnight—soybeans higher and corn wheat weaker. Hot and dry weather late in the growing season in South America is hurting the soybean crop there. Grain market bulls still have some upside technical momentum. Traders are awaiting Monday morning’s USDA weekly export inspections report.
