Monthly ECB Monetary Policy Meeting the Feature Thursday

* LATEST MARKET DEVELOPMENTS *

The major economic event for Thursday is the European Central Bank monthly monetary policy meeting. There is no change in ECB monetary policy expected at this meeting. However, there is growing pressure on the ECB to implement further monetary policy stimulus measures, amid worries about price deflation in the European Union. Some reckon the ECB make lower interest rates at its June meeting. The Euro currency is at a multi-week high against the U.S. dollar, and the strength of the common currency is also a concern to many European officials and another reason to EU interest rates. ECB President Mario Draghi’s press conference following the ECB meeting will be closely watched for clues on future ECB monetary policy moves.

Fed Chair Janet Yellen speaks to the U.S. Congress again today, this time to a Senate committee. The take away from Wednesday’s Yellen comments was that the U.S. economy is on the upswing, but don’t look for U.S. interest rates to rise any time soon due to a still-struggling housing sector.

The Russia-Ukraine tensions have not gone away, even though other market place matters have garnered the headlines this week. Traders and investors were somewhat assuaged Wednesday when reports said Russian President Vladimir Putin made comments that were deemed conciliatory. Gold and U.S. Treasuries have seen some safe-haven buying in recent weeks, amid the heightened Russia-Ukraine conflict. This matter is not going away soon and will likely see an escalation in tensions. This remains a bullish underlying factor for the gold market.

U.S. economic data due for release Thursday includes the weekly jobless claims report and ICSC chain store sales trends.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are elevated.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

–Jim Wyckoff

U.S. STOCK INDEXES

S&P 500 June e-mini futures: Prices are near steady in early U.S. trading. Bulls are still in technical control as prices hover not far below the record high. However, there is stiff technical resistance just above present prices. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. 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 to bearish early today. Today, shorter-term technical resistance comes in at 1,880.50 and then at last week’s high of 1,886.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,865.00 and then at this week’s low of 1,854.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are near steady early today. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. 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 bearish early today. Shorter-term technical resistance is seen at 3,550.00 and then at Wednesday’s high of 3,564.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,525.00 and then at this week’s low of 3,497.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are firmer in early U.S. trading. Buy stops likely reside just above technical resistance at 16,500 and then at the record high of 16,555. Sell stops likely reside just below technical support at 16,450 and then at 16,400. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly lower early today on mild profit taking. Bulls still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. 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 today. Shorter-term resistance lies at the overnight high of 136 5/32 and then at the contract high of 136 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 25/32 and then at 135 17/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 June U.S. T-Notes: Prices are weaker early today. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at this week’s high of 124.31.0 and then at the April high of 125.02.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.24.5 and then at 124.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The June U.S. dollar index is weaker in early trading and hovering near this week’s contract low. The bears have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 79.305 and then at 79.500. Shorter-term support is seen at the contract low of 79.090 and then at 79.000. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

June Nymex crude oil prices are near steady in early U.S. trading. In June Nymex crude, look for buy stops to reside just above resistance at this week’s high of $100.99 and then at $101.50. Look for sell stops just below technical support at $100.00 and then at $99.32. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mixed in overnight trading. The weekly USDA export sales data are out this morning. The corn and wheat market bulls are having a good week, but the soysoybean bulls have faded. Focus is on Friday’s USDA supply and demand report and on weather forecasts for the U.S. Corn Belt. Good corn and soybean planting progress has been made in the Corn Belt this week.