Tuesday, April 9–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, it was reported that China’s consumer price inflation came in lower than expected, at a 2.1% annual rate in March versus expectations of a 2.4% rise. This is a bullish underlying factor for the raw commodity sector. China is the world’s largest consumer of many raw commodities. The buzz in the market place continues on the Bank of Japan and its aggressive devaluation of the yen. The yen hit multi-year lows versus the U.S. dollar and Euro currencies overnight. There is also talk the European Central Bank could soon lower its interest rates, in the race to devalue. Weak U.S. jobs data last week suggests the U.S. Federal Reserve will not be easing its monetary policy any time soon. The devaluation of the major currencies is also a bullish underlying factor for hard assets in the investment world, including gold and silver. U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index, and monthly wholesale trade.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early yesterday. Bulls still 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 below the 9-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 last week’s high of 1,568.00 and then at 1,575.00. Buy stops likely reside just above those levels. Downside support for active traders yesterday is located at Monday’s low of 1,543.50 and then at last week’s low of 1,533.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer early yesterday. Bulls still 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 below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early yesterday. Shorter-term technical resistance is located at 2,800.00 and then at last week’s high of 2,823.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,783.00 and then at 2,771.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are slightly higher early yesterday. Bulls have the overall near-term technical advantage. Sell stops likely reside just below technical support at 14,500 and then at Monday’s low of 14,435. Buy stops likely reside just above technical resistance at last week’s high of 14,600 and then at 14,650. 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 lower early yesterday on more profit taking after hitting a four-month high on Friday. Bulls still have the overall near-term technical advantage.Shorter-term moving averages (4- 9- 18-day) are still 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. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at 147 even and then at the overnight high of 147 12/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 146 16/32 and then at 146 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 June U.S. T-Notes: Prices are weaker early yesterday on more profit taking after hitting a contract high on Friday. Bulls still have upside near-term technical momentum. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early yesterday. Shorter-term resistance lies at the overnight high of 132.29.5 and then at Monday’s high of 133.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.16.0 and then at 132.08.0. 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 lower in early U.S. trading. The greenback bulls still have the overall near-term technical advantage but are fading just a bit on profit taking. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at the overnight high of 82.820 and then at 83.000. Shorter-term support is seen at 82.500 and then at last week’s low of 82.310. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are slightly higher early yesterday on short covering following recent strong selling pressure. Bears still have some downside technical momentum. In May Nymex crude, look for buy stops to reside just above resistance at $94.00 and then at $94.50. Look for sell stops just below technical support at $93.00 and then at Monday’s low of $92.71. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed overnight. Wet, cool weather in the U.S. Midwest is starting to support the bullish camp in corn. But the bears can still argue that the soil moisture profile in the Corn Belt continues to improve. Cold weather in the U.S. Plains states is also supporting buying interest in wheat futures early this week due to worries of frost or freeze damage to the wheat crop. Traders are awaiting Wednesday’s release of the latest monthly USDA monthly supply and demand report. This particular report is harder for forecasters to peg, regarding stockpiles. Thus, there could be some higher volatility in the grain markets in the immediate aftermath of Wednesday’s report.