Thursday, April 4–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The latest “international incident” is North Korea and its bellicose rhetoric toward the U.S. and South Korea. North Korea has publicly threatened to attack the U.S. with nuclear missiles and is also threatening South Korea. The U.S. says it is taking North Korea’s threats seriously and has dispatched military assets to the region surrounding North Korea. The gold market and other safe-haven investment assets are presently not reacting bullishly to the uncertainty of the matter. However, that could change very quickly if the North Korea situation turns from just rhetoric to military conflict. In other news overnight, the Bank of Japan embarked on more monetary easing at its latest policy meeting. The move was not unexpected but the BOJ did act more aggressively to ease monetary policy than many expected. The BOJ move is an underlying bullish factor for the raw commodity sector. The European Central Bank and Bank of England also hold monetary policy meetings Thursday. The Euro currency fell to a fresh for-the-move low against the U.S. dollar following more downbeat economic news coming out of the European Union on Thursday. German and French purchasing managers’ data came in weaker than expected. Most agree the Euro zone is presently in a full blown economic recession. U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, and the global services PMI.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are firmer early yesterday. 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 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 this week’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 Wednesday’s low of 1,544.00 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 firmer early yesterday. Bulls have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early yesterday. 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 early yesterday. Shorter-term technical resistance is located at this week’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 this week’s low of 2,780.25 and then at last week’s low of 2,771.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.

Dow futures: Prices are higher early yesterday and hovering near this week’s all-time record high. Bulls have the solid near-term technical advantage. Sell stops likely reside just below technical support at 14,500 and then at Wednesday’s low of 13,455. Buy stops likely reside just above technical resistance at Wednesday’s high of 14,585 and then at this week’s high of 14,600. 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 bearish early yesterday. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly lower early yesterday. Bulls still have the near-term technical advantage and hit a three-month high on Wednesday. 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 Wednesday’s high of 145 20/32 and then at 146 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 145 even and then at 144 16/32. 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 have upside near-term technical momentum as prices Wednesday hit a 3.5-month high. 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 Wednesday’s high of 132.17.0 and then at 132.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.10.5 and then at 132.00.0. 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 solidly higher and hit an eight-month high overnight. The greenback bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bullish early yesterday. The dollar index finds shorter-term technical resistance at the overnight high of 83.545 and then at 83.750. Shorter-term support is seen at 83.000 and then at the overnight low of 82.830. Wyckoff’s Intra Day Market Rating: 6.5

NYMEX CRUDE OIL

Crude oil prices are near steady yesterday following Wednesday’s big price drop that did deflate the bulls. In May Nymex crude, look for buy stops to reside just above resistance at $95.00 and then at $96.00. Look for sell stops just below technical support at $94.00 and then at $93.50. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mostly weaker overnight. A stronger U.S. dollar index is a bearish factor for the grains Thursday morning. Traders will closely examine this morning’s weekly USDA export sales report. Serious near-term chart damage has been inflicted in the grain futures markets recently. The path of least resistance for corn, soybeans and wheat remains sideways to lower. 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 at present. However, if the wet weather in the Corn Belt persists, it could cause concern about corn-planting delays.

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