Russia-Ukraine Tensions Heat Up Just a Bit

* LATEST MARKET DEVELOPMENTS *

A feature in the market place this week has been the plunge in the value of the Chinese yuan against the U.S. dollar, after China’s monetary officials widened the trading band between the two currencies. The yuan has dropped to a more-than-one-year low against the greenback this week.

Meantime, the U.S. dollar index has surged following the FOMC news Wednesday afternoon, which in turn has been a bearish underlying factor for commodity markets, including gold. The dollar index is a basket of six major currencies weighted against the greenback.

The Ukraine-Russia conflict has not completely disappeared from the radar screen of the market place. Tensions have risen a bit Friday as the U.S. on Thursday slapped stiffer economic sanctions on Russia. The European Union is set to follow suit with its own sanctions against Russia. And Russia, in turn, is sanctioning the U.S. and EU. Gold, the U.S. dollar and U.S. Treasuries are not presently drawing significant safe-haven bids from this situation. However, any significant escalation of tensions between Ukraine and Russia would quickly put keen risk-aversion back into the market place.

The Russian stock and financial markets are feeling the bearish effects of world sanctions and from credit ratings agencies that have or are looking to downgrade Russia’s credit rating.

There is no major U.S. economic data due for release Friday. Traders are looking ahead to some fresh Chinese economic data due out early next week.

Wyckoff’s Daily Risk Rating: 5.0 (The Ukraine situation has for the moment de-escalated and has become a non-factor.)

(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 Wyckoff

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer in early U.S. trading today and are poised to close at a technically bullish weekly high close. The 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 neutral to bullish early today. Today, shorter-term technical resistance comes in at 1,874.50 and then at the record high of 1,891.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,863.40 and then at 1,850.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are higher early today. 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 neutral early today. Shorter-term technical resistance is located at the overnight high of 3,706.00 and then at 3,721.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,688.25 and then at 3,675.00. 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. Buy stops likely reside just above technical resistance at 16,350 and then at 16,400. Sell stops likely reside just below technical support at 16,265 and then at 16,200. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-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 slightly higher early today on a corrective bounce and short covering from losses posted Wednesday. Bulls have the slight overall near-term technical advantage but are fading. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below 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 the overnight high of 132 11/32 and then at 132 20/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131 26/32 and then at 131 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 June U.S. T-Notes: Prices are slightly higher early today. Bulls gave faded badly this week. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-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 Thursday’s high of 123.19.0 and then at 123.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 123.11.5 and then at this week’s low of 123.05.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly lower in early trading, on a corrective pullback from strong gains seen the past two days. Bears still have the near-term technical advantage. Slow stochastics for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.385 and then at this week’s high of 80.505. Shorter-term support is seen at the overnight low of 80.230 and then at 80.000. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

May Nymex crude oil prices are firmer in early U.S. trading. The 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 $100.00 and then at $101.00. Look for sell stops just below technical support at $99.00 and then at the overnight low of $98.25. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were weaker overnight on some profit taking heading into the weekend. The grain market bulls still have the overall near-term technical advantage. Focus remains on U.S. exports and the potential for China cancelling soybean sales previously booked. The rally in the U.S. dollar index this week is a bearish underlying factor for the grains. The March 31 USDA planting intentions report is coming into view. It’s one of the most important USDA reports of the year.