Wednesday, April 3–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, there were new developments on the Cyprus banking crisis front Wednesday. The island nation reached an agreement with the IMF for an additional 1 billion Euro “lifeline” loan. There was little market reaction to that news. Euro zone inflation rose at its slowest rate in two years in March, at a 1.7% annualized rate, according to the Euro zone statistics bureau, Eurostat. There are key central bank meetings of the European Central Bank, the Bank of Japan and Bank of England on Thursday, all of which will be closely monitored by the market place. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the ISM non-manufacturing report, and the weekly DOE energy stocks report. Traders and investors are looking ahead to Friday’s release of the U.S. employment situation report, which is arguably the most important U.S. economic report of the month. The consensus forecast calls for the key non-farm payrolls figure to have risen by 200,000 in March, with the overall unemployment rate unchanged from the previous month, at 7.7%.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are slightly higher early yesterday and hovering near Tuesday’s five-year high. Bulls have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early yesterday. 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 neutral early yesterday. Yesterday, shorter-term technical resistance comes in at Tuesday’s for-the-move 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 Tuesday’s low of 1,555.40 and then at last week’s low of 1,539.20. 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 yesterday and hovering near Tuesday’s six-month high. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are bullish early yesterday. 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 neutral early yesterday. Shorter-term technical resistance is located at Tuesday’s high of 2,823.00 and then at 2,835.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,800.00 and then at Tuesday’s low of 2,786.25. 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 and hovering near Tuesday’s all-time record high. Bulls have the solid near-term technical advantage. Sell stops likely reside just below technical support at Tuesday’s low of 14,550 and then at 13,500. Buy stops likely reside just above technical resistance Tuesday’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 to bullish early yesterday. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are near steady early yesterday. Bulls still have the slight near-term technical advantage, amid safe-haven demand recently. 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 neutral early yesterday. Shorter-term resistance lies at the overnight high of 144 19/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 144 even and then at 143 24/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 June U.S. T-Notes: Prices are near steady early yesterday. Bulls still have some 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 neutral early yesterday. Shorter-term resistance lies at this week’s high of 132.08.0 and then at last week’s high of 132.11.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 131.29.0 and then at this week’s low of 131.23.5. 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 near steady early yesterday. The greenback bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early yesterday. The dollar index finds shorter-term technical resistance at the overnight high of 83.245 and then at this week’s high of 83.365. Shorter-term support is seen at 83.000 and then at 82.810. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are weaker early yesterday on mild profit taking after hitting a six-week high on Monday. Bulls still have the near-term technical advantage. In May Nymex crude, look for buy stops to reside just above resistance at $97.00 and then at Tuesday’s high of $97.44. Look for sell stops just below technical support at the overnight low of $96.51 and then at $96.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were mixed overnight on short covering and technical chart consolidation following recent strong selling pressure, led by corn. Serious near-term chart damage has been inflicted in the grain futures markets recently, following the bearish USDA data last week. How the grain markets close out this week will be extra important. Closes in the grains near the weekly high on Friday would be a clue that prices have likely put in market bottoms. If that’s not the case, then more downside price pressure is likely in the grain futures markets in the coming weeks. U.S. Corn Belt weather patterns will start to dominate the fundamental news in the coming weeks, but wetter weather patterns in the central U.S. are also bearish for the grains.
