Tuesday, May 14–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
It was an uneventful overnight trade in Asia and Europe Tuesday. Fresh economic data from Europe was mixed Tuesday. The German ZEW index for May came in at 36.4 versus 36.3 in April, but below expectations of 39.5. However, European Union industrial production rose 1.0% in March, the largest monthly increase in 1.5 years. Good demand at a Spanish government bond auction is a clue that the European sovereign debt crisis is presently residing on the back burner of the market place stove. Australia’s government budget was released Tuesday and it hinted further easing of that country’s monetary policy is very possible. That news dropped the Aussie dollar to an 11-month low versus the greenback. U.S. economic data due for release Tuesday includes the NFIB small business index, weekly Goldman Sachs and Johnson Redbook retail sales reports, and import and export price indexes.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are weaker early today and hovering near the all-time high. Bulls still 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 Monday’s record high of 1,632.80 and then at 1,640.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,615.00 and then at last week’s low of 1,607.40. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
Nasdaq index futures: Prices are weaker early today but not far below Monday’s 12-year high. Bulls still 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 to bearish early today. Shorter-term technical resistance is located at Monday’s high of 2,987.50 and then at 3,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Monday’s low of 2,960.50 and then at 2,950.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
Dow futures: Prices are weaker early today and hovering near the record high. Bulls still have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Monday’s high of 15,065 and then at last week’s record high of 15,105. Sell stops likely reside just below technical support at 15,000 and then at 14,980. 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: 4.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are higher early today on short covering after hitting a six-week low Monday. Bulls are still in near-term technical trouble. 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 to bullish early today. Shorter-term resistance lies at 145 16/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 144 15/32 and then at Monday’s low of 144 6/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 June U.S. T-Notes: Prices are slightly higher early today on short covering after hitting a six-week low on Monday. 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 to bullish early today. Shorter-term resistance lies at Monday’s high of 132.05.5 and then at 132.10.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.27.0 and then at Monday’s low of 131.23.5. 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 firmer in early U.S. trading and hovering near this year’s high. Bulls have the overall near-term technical advantage and have momentum on their side. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at last week’s high of 83.520 and then at the April high of 83.660. Shorter-term support is seen at the overnight low of 83.045 and then at 82.765. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
Crude oil prices are weaker again early today, pressured by the recently 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 $95.00 and then at the overnight high of $95.66. Look for sell stops just below technical support at $94.00 and then at last week’s low of $93.37. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were narrowly mixed in overnight trading, on some chart consolidation. Weather in the U.S. Corn Belt is the main focus for grain traders. Temperatures are expected to rise dramatically Tuesday but then cool down later in the week, with good rainfall chances. A good portion of the U.S. corn crop has been and will get planted in the coming days. However, the progress is still behind normal.Soybean futures bulls have gained some upside momentum amid very strong cash basis levels in the U.S. Wheat futures trading remains very choppy. Wheat will be a follower of the corn market in the near term. Recent big swings in the central U.S. weather patterns are a hint that the growing season in the U.S. will produce high volatility in the grain futures markets in the coming weeks and few months.
