Monday, March 11–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, Italian bond yields rose Monday after the Fitch ratings agency late Friday downgraded the country’s credit rating. That news helped to pressure European stock markets Monday. However, the Organization for Economic Cooperation and Development issued a report that said the European Union will see improving economic conditions in the coming months. However, the OECD projected weaker economic growth in China, Canada and India in the coming months. Meantime, fresh economic data from China was downbeat, as weekend figures showed the inflation rate rose to 3.2% in February from 2.0% in January, on an annualized basis. That prompted worries Chinese monetary officials could move to tighten monetary policy. Industrial production and retail sales data for China were also weaker than expected. 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 weaker early today but hovering near a five-year high. The bulls 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 to bearish early today. Today, shorter-term technical resistance comes in at Friday’s high of 1,550.10 and then at 1,560.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Friday’s low of 1,535.60 and then at 1,524.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker in early trading but hovering near a five-month high. Bulls have the 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is located at 2,800.00 and then at Friday’s high of 2,817.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,788.00 and then at 2,775.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.

Dow futures: Prices are weaker early today and hovering near last week’s all-time record high. The bulls have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at Friday’s low of 14,265 and then at 14,200. Buy stops likely reside just above technical resistance at Friday’s record high of 14,340 and then at 14,400. Shorter-term moving averages are bullish early today, 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 early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early today on short covering after hitting a contract low on Friday. Bears still have the overall near-term technical advantage. 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 early today. Shorter-term resistance lies at the overnight high of 141 8/32 and then at 141 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 140 22/32 and then at Friday’s contract low of 140 14/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5June U.S. T-Notes: Prices are firmer early today on short covering after prices Friday hit a three-week low. Bears have the near-term technical advantage. 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 early today. Shorter-term resistance lies at the overnight high of 130.12.5 and then at 130.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 130.02.5 and then at Friday’s low of 130.00.0. 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 firmer early today. The greenback bulls still have the near-term technical advantage as prices hover not far below Friday’s seven-month high. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Friday’s high of 83.160 and then at 83.250. Shorter-term support is seen at the overnight low of 82.910 and then at 82.795. Wyckoff’s Intra Day Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are slightly lower early today. Bears still have the overall near-term technical advantage. In April Nymex crude, look for buy stops to reside just above resistance at last week’s high of $92.03 and then at $92.50. Look for sell stops just below technical support at $91.00 and then at $90.22. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were firmer overnight on more short covering. Last Friday’s USDA supply and demand report was deemed mostly neutral but slightly supportive for corn. The soybean market bulls are hanging tough but there is still overhead technical resistance just above the market. The corn market bulls showed some strength late last week but need to show that important follow-through strength this week. Meantime, the wheat market bulls remain very weak, which is also keeping a lid on price strength in corn and soybeans.