Tuesday, May 7–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, Australia’s central bank cuts its interest rate to a record low of 2.75% in an effort to keep its economy afloat and to weaken the Australian dollar. Yet another major central bank is working to debase its currency. Such is a bullish underlying factor for hard assets and the precious metals markets–and especially gold, which many investors view as a currency in itself. In Asian trading the Japanese stock market hit a five-year high on the first trading day after the Golden Week holiday break. There will be some key economic data from China released on Wednesday and Thursday. A Dow Jones Newswires report Tuesday highlighted that falling factory inventories in China are a strong signal the world’s second-largest economy is sputtering a bit. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the global services PMI, and the consumer credit report.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices slightly higher early today and poked to another new all-time high overnight. 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 early today. Today, shorter-term technical resistance comes in at 1,625.00 and then at 1,635.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,609.40 and then at 1,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early today and hit another 12-year high overnight. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is located at 2,965.00 and then at 2,975.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,943.25 and then at 2,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are firmer early today and hovering near the record high. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at last week’s high of 14,955 and then at 15,000. Sell stops likely reside just below technical support at Monday’s low of 14,880 and then at 14,850. 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 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 lower early today and hit a fresh three-week low overnight. Bulls are in near-term technical trouble. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 146 31/32 and then at Monday’s high of 147 13/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 146 even and then at 145 26/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0June U.S. T-Notes: Prices are slightly lower early today and hit a fresh three-week low overnight. Bulls 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 bearish early today. Shorter-term resistance lies at the overnight high of 132.28.5 and then at 133.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.19.5 and then at 132.16.0. 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 lower in early U.S. trading. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.400 and then at 82.610. Shorter-term support is seen at Monday’s low of 82.040 and then at last Friday’s low of 81.835. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bulls still have some upside momentum. In June Nymex crude, look for buy stops to reside just above resistance at last week’s high of $96.04 and then at $97.00. Look for sell stops just below technical support at the overnight low of $95.26 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were higher in overnight trading, on a corrective technical bounce following strong losses suffered on Monday. The U.S. Corn Belt is seeing drier and warmer weather and it appears a big chunk of the Corn Belt corn crop will get planted in the coming days. That’s bearish for corn, and corn is presently the leader in the grains complex. Soybeans and wheat will follow the corn futures market for the near term. Traders are awaiting Friday’s monthly USDA supply and demand report. However, the weather in the central U.S. is still the major fundamental factor in the grain futures markets, at present.