Thursday, March 7–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The Euro currency and European stock markets were boosted Thursday by a successful Spanish bond auction that saw good investor demand and lower yields. The European Central Bank holds its monthly meeting and press conference on Thursday. While the ECB is expected to announce no major changes to its monetary policy, traders will closely scrutinize ECB chief Mario Draghi’s remarks at his press conference following the meeting. The Bank of England’s monthly meeting Thursday saw no change in interest rates or monetary policy, as expected. The Bank of Japan also held a policy meeting Thursday that saw no major changes. The most important U.S. economic report of the month, the employment situation report for February, is due out Friday morning. The key non-farm payroll number is expected to come in at up 157,000, while the unemployment rate is forecast at 7.8%. China issues its monthly trade data on Friday, and that data, too, will be closely monitored. U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, the U.S. trade report, and ICSC chain store sales trends.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early yesterday and 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 yesterday. 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 yesterday. Yesterday, shorter-term technical resistance comes in at 1,550.00 and then at 1,565.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at Wednesday’s low of 1,537.20 and then at Tuesday’s low of 1,524.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer in early trading and 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 neutral early yesterday. 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 yesterday. Shorter-term technical resistance is located at Wednesday’s high of 2,809.25 and then at 2,825.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the 2,780.00 and then at Tuesday’s low of 2,761.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early yesterday and hovering near the all-time record high. The bulls have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at Wednesday’s low of 14,255 and then at 14,200. Buy stops likely reside just above technical resistance at Wednesday’s record high of 14,305 and then at 14,350. Shorter-term moving averages are bullish early yesterday, 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 yesterday. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly higher early yesterday. Bulls have faded amid the rallying U.S. stock market and better investor risk appetite this week. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. 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 neutral early yesterday. Shorter-term resistance lies at the overnight high of 143 5/32 and then at 143 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 142 23/32 and then at 142 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 June U.S. T-Notes: Prices are slightly higher early yesterday. Bulls are fading. Shorter-term moving averages (4- 9- 18-day) are neutral early yesterday. 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 neutral early yesterday. Shorter-term resistance lies at the overnight high of 131.10.5 and then at Wednesday’s high of 131.17.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 131.04.0 and then at 131.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The U.S. dollar index is weaker early yesterday on a corrective, profit-taking pullback. The greenback bulls still have the near-term technical advantage as prices hover near a six-month high. Slow stochastics for the dollar index are neutral early yesterday. The dollar index finds shorter-term technical resistance at this week’s high of 82.865 and then at 83.000. Shorter-term support is seen at 82.500 and then at this week’s low of 82.165. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are slightly higher early yesterday, on short covering. Prices are not that far above this week’s nine-week low. Bears still have some downside technical momentum. In April Nymex crude, look for buy stops to reside just above resistance at this week’s high of $91.17 and then at $92.00. Look for sell stops just below technical support at $90.00 and then at this week’s low of $89.33. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were firmer overnight on short covering. The key “outside markets” are also modestly bullish for the grains early yesterday, as the U.S. dollar index is weaker and crude oil prices are firmer. Traders will scrutinize this morning’s weekly USDA export sales report. Traders are also awaiting Friday morning’s USDA supply and demand report.