Thursday, May 9–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, China reported its producer price index dropped more than expected in April, which suggests slowing production in China. Meantime, China also reported its consumer price inflation rate rose more than expected–up 2.4% versus expectations of a 2.2% rise, on an annual basis–which suggests China monetary officials could tighten monetary policy to ward off inflationary price pressures. Thursday’s data from the world’s largest raw commodity consumer is bearish for that sector. In other news, the Bank of Korea unexpectedly cut its interest rates overnight, while the Bank of England left its monetary policy unchanged. The European Central Bank reported Thursday the Euro zone economy remains weak and could get weaker. U.S. economic data due for release Thursday includes the weekly jobless claims report and ICSC chain store sale trends.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices slightly lower early today and poked to another new all-time 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 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 the overnight high of 1,631.20 and then at 1,640.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Wednesday’s low of 1,617.20 and then at 1,609.40. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are slightly lower early today and hit another fresh 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 to bearish early today. Shorter-term technical resistance is located at the overnight high of 2,967.50 and then at 2,975.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 2,936.50 and then at 2,925.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
Dow futures: Prices are slightly lower early today and hovering near the record high. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Wednesday’s record high of 15,062 and then at 15,100. Sell stops likely reside just below technical support at 15,000 and then at Wednesday’s low of 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 early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are firmer early today on short covering and bargain hunting. 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 bullish early today. Shorter-term resistance lies at the overnight high of 147 4/32 and then at this week’s high of 147 8/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 146 16/32 and then at this week’s low of 146 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5 June U.S. T-Notes: Prices are firmer early today on short covering. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is even with the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 133.00.0 and then at 133.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.23.0 and then at this week’s low of 132.17.0. 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 slightly higher in early U.S. trading. Bulls still have the overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 82.250 and then at this week’s high of 82.475. Shorter-term support is seen at this week’s low of 81.780 and then at 81.500. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are weaker early today. Bulls still have some upside momentum. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $96.77 and then at this week’s high of $97.17. Look for sell stops just below technical support at $95.50 and then at $95.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were narrowly mixed in overnight trading, on short covering and position evening ahead of Friday’s monthly USDA supply and demand report. That report is expected to be bearish for corn and soybeans. The U.S. Corn Belt saw some scattered showers overnight, but is generally seeing drier and warmer weather this week, with more dry and warm weather in the forecast for next week. That’s bearish for corn, as a big chunk of the U.S. corn crop will get planted in the coming days if the weather forecasts are correct. Corn is the price leader in the grain futures complex at present.
