* LATEST MARKET DEVELOPMENTS *
Gold is in the spotlight Thursday as prices have been dropping for the past week. June gold futures on Wednesday dropped and closed below important psychological support at $1,400.00 an ounce, to further erode the near-term technical posture of the yellow metal. Weak long liquidation and fresh technical short selling in the gold futures market is featured Thursday morning. Several fundamental factors are presently stacked against the gold market. Strong world stock markets are pulling away money from other investment classes, including safe-haven gold. There is presently a low-inflation environment in the major world economies, with even some talk of deflationary price pressures building. Deflation is the archenemy of all raw commodity markets, including the precious metals. There has been lackluster physical gold demand in Asia that is also a bearish weight on gold recently. Reports overnight said new India government regulations to thwart gold speculation have worked to decrease consumer demand in that gold-hungry nation. Reports Thursday said U.S. government filings show legendary investor George Soros and the BlackRock fund have cut their holdings in gold exchange traded funds. A World Gold Council report Thursday also reaffirmed the exodus of investor monies from gold ETFs the past few months. In other news overnight, the European Union on Thursday reported a record trade surplus in March. That news was a glimmer of hope that the Euro zone economy may be recovering from its recession. Federal Reserve Bank of Philadelphia president Charles Plosser said in Italy Thursday that the central banks of the world cannot create wealth and said central banks do not have the tools to fix the present economic and financial problems in the major industrialized countries. He said the U.S. should wind down its quantitative easing program. Plosser’s comments were in line with what many of my readers already knew: Major central banks of the world continuing to run their money-printing presses is at best a short-term bandaid which will eventually create a major long-term problem. The inflationary implications of the extremely easy central bank monetary policies of the past few years is very likely to be a long-term bullish factor for gold and other raw commodity markets. U.S. economic data due for release Thursday includes the weekly jobless claims report, the consumer price index, real earnings, new residential construction, and the Philadelphia Fed business survey.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today and hovering near Wednesday’s all-time high. Not much new. 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 Wednesday’s high of 1,659.30 and then at 1,675.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,644.20 and then at 1,632.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are slightly higher early today and poked to 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 early today. Shorter-term technical resistance is located at the overnight high of 3,008.25 and then at 3,025.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,996.00 and then at Wednesday’s low of 2,982.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are near steady early today and hovering near this week’s record high. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Wednesday’s high of 15,270 and then at 15,300. Sell stops likely reside just below technical support at 15,200 and then at Wednesday’s low of 15,160. 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are near steady early today and hovering not far above this week’s six-week low. Bears are in near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 144 18/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 143 30/32 and then at this week’s low of 143 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 weaker early today and hovering just above this week’s six-week low. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 132.00.0 and then at this week’s high of 132.05.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.23.0 and then at this week’s low of 131.16.0. 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 slightly higher in early U.S. trading and hovering near Wednesday’s 9.5-month high. Bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Wednesday’s high of 84.220 and then at 84.500. Shorter-term support is seen at the overnight low of 84.125 and then at Wednesday’s low of 83.680. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
Crude oil prices are weaker again early today and bulls are fading. Oil is pressured by the stronger U.S. dollar index and worries about worldwide demand for oil. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $94.37 and then at $95.00. Look for sell stops just below technical support at the overnight low of $93.23 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were slightly higher in overnight trading, on short covering. Bearish “outside markets” that include a higher U.S. dollar index and lower crude oil prices this week are limiting the upside in the grains. The entire raw commodity sector is under selling pressure this week due to the surging greenback. Weather in the U.S. Corn Belt is a main focus for grain traders. Drier and warmer weather has allowed a big chunk of the corn crop to get planted. In fact, this week could show record corn-planting progress when next week’s USDA crop progress reports are released. Soybean bulls still have some upside technical momentum but need to show fresh power soon. Wheat trading remains choppy and sideways, but with the bears holding the advantage. Traders will closely examine Thursday morning’s weekly USDA export sales report.
