Monday, April 15–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
Gold and silver futures markets are leading a downdraft in the raw commodity sector as the new week begins. Both gold and silver markets have crashed the past two trading sessions. Gold has lost more than $150.00 an ounce and silver has shed more than $4.00 an ounce since last Thursday’s closing levels in New York. Gold is now at its lowest price level in more than two years. Nymex crude oil futures prices have dropped over $4.00 a barrel in the same time period. There has been no single fundamental catalyst for the panic selling in the gold and silver markets. But the fear in the commodity trading world is pervasive Monday morning, which has most commodity futures markets and world stock markets under selling pressure. “When in doubt, get out” is the mantra of raw commodity market bulls Monday. Worries about demand for physical gold from China and India are getting some of the blame for the mass exodus of longs out of the gold and silver markets. Overnight, China reported its economy grew slower than expected during the first quarter, at 7.7% versus the expected rate of 8% annual growth. There are also worries about troubled European Union countries selling their gold reserves to help finance their financial bailouts from the European Central Bank and the International Monetary Fund. Cyprus government officials last week said selling part of that financially imperiled country’s gold reserves was on the table. Last week’s Federal Reserve FOMC meeting that signaled Fed members are divided on when to end the Fed’s quantitative easing of monetary policy also spooked the raw commodity market bulls.U.S. economic data due for release Monday includes the Empire State manufacturing survey, Treasury international capital data, and the NAHB housing market index.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are lower early today on profit taking after hitting an all-time high last Thursday. Bulls still 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. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,582.80 and then at last week’s high of 1,592.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,561.20 and then at 1,550.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are lower early today on profit taking after hitting a six-month high last Thursday. Bulls still 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. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at last week’s high of 2,858.50 and then at 2,875.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 2,828.25 and then at 2,800.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early today on profit taking after hitting another all-time high last Thursday. Bulls still have the solid overall near-term technical advantage. Sell stops likely reside just below technical support at 14,700 and then at 14,660. Buy stops likely reside just above technical resistance at Friday’s high of 14,800 and then at last week’s high of 14,818. Shorter-term moving averages are still 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 to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are higher early today, on some safe-haven demand due to the uncertainty regarding the downdraft in commodity market prices. Bulls have the 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 and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 148 2/32 and then at the April high of 148 9/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 147 16/32 and then at the overnight low of 147 5/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 June U.S. T-Notes: Prices are higher early today on some flight-to-quality buying. Bulls 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 133.06.0 and then at the April high of 133.11.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.28.0 and then at 132.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The U.S. dollar index is slightly lower in early U.S. trading. Surprisingly, the greenback is not seeing much safe-haven demand Monday, despite all the uncertainty in the market place. The index has turned choppy to lower recently as the bulls have faded a bit. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.500 and then at 82.680. Shorter-term support is seen at last week’s low of 82.140 and then at 82.000. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are sharply lower early today and hit a four-month low overnight. Bulls are fading badly. In May Nymex crude, look for buy stops to reside just above resistance at $90.00 and then at $91.00. Look for sell stops just below technical support at the overnight low of $88.05 and then at $87.50. Wyckoff’s Intra-Day Market Rating: 3.0
GRAINS
Markets were lower overnight. The panic selling in gold, silver, copper and crude oil has spilled over into selling pressure in the grains. Beneficial moisture that has fallen over the U.S. Plains and Corn Belt states the past few weeks is also a bearish underlying factor for today, despite the notion that corn planting delays are likely this spring.
