Wednesday, April 17–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The world market place continues to calm down and focus more on individual markets’ supply and demand fundamentals, instead of the world geopolitical scene. European stock markets were lower Wednesday, on more dour economic news coming out of the European Union. Asian stock markets were firmer as focus moved back toward the regional matters in Asia. On tap in the U.S. Wednesday is the Federal Reserve’s beige book, which will be closely scrutinized by traders and investors, given recent machinations by Fed officials regarding the central bank’s quantitative easing policies and how long to keep them in place. There were more reports overnight of strong demand for physical gold coming out of the Asian region, and especially India. Many market watchers are commenting this week that the holders of “paper gold” (ETFs and futures contracts) have been queued up as major sellers, while the actual holders of physical gold have been lined up as big buyers on the dip. The World Gold Council said Wednesday the overall fundamental picture in gold has not changed, despite the recent downdraft in prices. As a 30-year market reporter, trader and analyst, I have seen many extreme price moves in many markets. This recent big sell off in gold is certainly extraordinary. However, nearly all markets traded have extraordinary moments and extreme price moves. But when the dust settles those markets return to normal trading conditions. And the trader/investor attitudes toward those markets do not change. Such is likely to be the case in the gold and silver markets. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE energy stocks report, and the Federal Reserve’s beige book.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are lower early today as trading has turned choppy. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,568.30 and then at this week’s high of 1,582.80. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,539.00 and then at the April low of 1,533.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.0
Nasdaq index futures: Prices are lower early today as trading has turned choppy. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are still 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 2,817.00 and then at the overnight high of 2,830.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 2,785.25 and then at this week’s low of 2,771.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.
Dow futures: Prices are lower early today as trading has turned choppy this week. Bulls still have the overall near-term technical advantage. Sell stops likely reside just below technical support at this week’s low of 14,520 and then at 14,500. Buy stops likely reside just above technical resistance at 14,605 and then at 14,650. 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 early today. Wyckoff’s Intra-Day Market Rating: 4.0
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are higher early today. Trading is choppy this week. 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 3/32 and then at this week’s high of 148 14/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 147 13/32 and then at this week’s low of 147 5/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 June U.S. T-Notes: Prices are firmer early today. Bulls have the 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 early today. Shorter-term resistance lies at this week’s high of 133.09.0 and then at the April high of 133.11.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 132.25.5 and then at 132.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The U.S. dollar index is solidly higher in early U.S. trading, on a good bounce from Tuesday’s losses. The index has turned choppy 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 82.500 and then at this week’s high of 82.620. Shorter-term support is seen at 82.000 and then at this week’s low of 81.780. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Crude oil prices are lower early today. Bears have downside near-term technical momentum. In May Nymex crude, look for buy stops to reside just above resistance at $88.00 and then at $89.00. Look for sell stops just below technical support at $87.00 and then at this week’s low of $86.06. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were narrowly mixed overnight. Beneficial moisture that has fallen over the U.S. Plains and Corn Belt states the past few weeks is a bearish underlying factor for grains. However, the specter of corn-planting delays likely this spring is somewhat limiting the downside in corn. The corn-planting delay issue will likely be a major market factor when trading gets under way next week. Reports said cash basis levels for corn and soybeans in the U.S. are firm due to very limited farmer selling in the cash market.
