Tuesday, April 16–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place had much going on Monday, and then the afternoon terror attack in Boston jolted already shaky trader and investor attitudes. Emotions are a little less frayed on Tuesday morning, as gold has rebound well off its overnight two-plus-year low of $1,321.50 an ounce in June futures. However, there remains keener anxiety in the market place early this week, with much for traders and investor to ponder as the week plays out. This week’s price action in many markets will likely be extra important for price direction in the coming weeks. How markets close on Friday (near their weekly highs or weekly lows) could be a harbinger of price action in the particular market for the coming weeks, or a bit longer. Reports overnight said physical demand for gold all across Asia has increased sharply following the recent plunge in gold prices. Major gold consumers China and India saw their citizens snapping up gold jewelry and bars as prices reached two-year lows. Some retail stores in Asia ran out of gold products for sale. The big jump in demand for physical gold helped stop the bleeding in the gold market. June gold hit its low of $1321.50 in the aftermath of the apparent terrorist attack in Boston and as the CME Group raised margins on trading of gold futures. In other news overnight, German economic expectations declined sharply in April as the closely watched ZEW index fell for the first time in five months–to 36.3 in April from 48.5 in March. The April figure was well below market expectations of a reading of 43.0. Also, Euro zone inflation fell to 1.7% on an annual basis in March, from 1.8% in February. The Euro zone inflation rate is the lowest since August of 2010. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the consumer price index, real earnings, new residential construction, industrial production and capacity utilization, and the IMF world economic outlook.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early Tuesday on a corrective bounce from selling pressure Monday. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early Tuesday. 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 Tuesday. Tuesday, shorter-term technical resistance comes in at 1,568.00 and then at Monday’s high of 1,582.80. Buy stops likely reside just above those levels. Downside support for active traders Tuesday is located at Monday’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: 5.5

Nasdaq index futures: Prices are higher early Tuesday on a corrective bounce from Monday’s losses. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are still bullish early Tuesday. 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 Tuesday. Shorter-term technical resistance is located at 2,817.00 and then at 2,823.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,785.25 and then at Monday’s low of 2,771.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer early Tuesday on a corrective rebound from Monday’s declines. Bulls still have the overall near-term technical advantage. Sell stops likely reside just below technical support at 14,550 and then at Monday’s low of 14,520. Buy stops likely reside just above technical resistance at 14,650 and then at 14,700. Shorter-term moving averages are still bullish early Tuesday, 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 bearish early Tuesday. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are weaker early Tuesday on some profit taking after hitting a four-month high on Monday. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early Tuesday. 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 Tuesday. Shorter-term resistance lies at 148 even and then at the overnight high of 148 14/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at Monday’s low of 147 5/32 and then at 147 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 Tuesday on some profit taking after closing at a new contract high close on Monday. Bulls still have the near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early Tuesday. 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 Tuesday. Shorter-term resistance lies at 133.00.0 and then at the overnight high of 133.08.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.24.0 and then at 132.16.0. 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. Surprisingly, the greenback is not seeing much safe-haven demand early this week, 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 Tuesday. The dollar index finds shorter-term technical resistance at 82.500 and then at the overnight high of 82.620. Shorter-term support is seen at last week’s low of 82.140 and then at 82.000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are slightly lower early Tuesday, but well up from the overnight low of $86.06, which is also a 9.5-month low. Bears still have downside near-term technical momentum. In May Nymex crude, look for buy stops to reside just above resistance at $89.00 and then at $90.00. Look for sell stops just below technical support at $88.00 and then at $87.50. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed overnight. The panic selling in gold, silver, copper and crude oil the past two sessions did spill over into selling pressure in the grains. The grains will likely continue to look to the “outside markets” for direction in the near term. However, 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. The notion that corn planting delays are likely this spring is somewhat limiting the downside in corn. Drier weather is in the forecast for next week, and that’s also a bit bearish for corn.