* LATEST MARKET DEVELOPMENTS *
Friday is the last trading day of the week and of the month, making it an extra important day for the markets, from at least a technical standpoint. It’s a significant development, from a chart perspective, when a market’s price closes at or near its weekly, monthly or quarterly high or low.
Trading was again quieter overnight in Europe and Asia, with many markets pausing as focus is turning to next week’s monthly monetary policy meeting of the European Central Bank. It’s widely believed the ECB will announce further monetary policy stimulus measures at that meeting. Recent weak European Union economic data and fears of deflation setting in for the EU are solid reasons for the ECB to make a move next week.
Markets are also awaiting key manufacturing data from China to be released over the weekend and which could impact the market place on Monday. China’s official manufacturing purchasing managers index is due out.
U.S. economic data due for release Friday includes personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.
Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine crisis has not escalated and the rest of the world is quieter regarding geopolitics. However, the falling U.S. Treasury yields may be a harbinger of trouble ahead.)
(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 June e-mini futures: Prices are slightly lower in early trading and hovering near Thursday’s record high. Bulls are in solid overall near-term technical control. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. 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 bearish early today. Today, shorter-term technical resistance comes in at the record high of 1,918.00 and then at 1,925.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 1,907.00 and then at 1,900.00. 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 and are hovering near a three-month high. Bulls have the solid overall near-term technical advantage. 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 bearish early today. Shorter-term technical resistance is seen at the April high of 3,740.00 and then at 3,750.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 3,714.00 and then at 3,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
Dow futures: Prices are slightly lower in early U.S. trading and hovering not far below the record high. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at the record high of 16,690 and then at 16,700. Sell stops likely reside just below technical support at Thursday’s low of 16,610 and then at 16,545. 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 below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bullish early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are weaker early today on profit taking after hitting a contract high on Thursday. 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. 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 138 23/32 and then at the contract high of 139 3/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 29/32 and then at 137 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 weaker on profit taking after hitting a contract high on Thursday. 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. 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 126.10.5 and then at 126.17.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 126.04.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The June U.S. dollar index is weaker in early trading, on profit taking after hitting a seven-week high on Wednesday. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at this week’s high of 80.630 and then at the April high of 80.770. Shorter-term support is seen at Thursday’s low of 80.400 and then at this week’s low of 80.225. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
July Nymex crude oil prices are weaker in early U.S. trading, on profit taking. Bulls still have the overall near-term technical advantage. In July Nymex crude, look for buy stops to reside just above resistance at the overnight high of $103.56 and then at $104.00. Look for sell stops just below technical support at this week’s low of $102.61 and then at $102.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were narrowly mixed in overnight trading. Traders will closely examine this morning’s weekly USDA export sales report. Soybean bulls have the solid near-term technical advantage. Wheat and corn bears have the near-term technical edge. Focus in the grains will remain in weather patterns in the U.S. midsection. Presently, the weather in the central U.S. is a mixed bag and normal for this time of year. However, don’t be surprised in the next few weeks if the first summertime weather scare pops up in the grain futures market.
