Russia-Ukraine Tensions Still High to Start Trading Week

* LATEST MARKET DEVELOPMENTS *

The Russia-Ukraine situation sees tensions still very high as the weekend saw a secession referendum vote taken in eastern Ukraine, in which the pro-Russia separatists won. The voting process was said by some observers to be chaotic. The government of Ukraine called the secession vote illegal and blamed Russia for stirring up more trouble. The Russian government said it would respect the weekend vote to secede. Meantime, the European Union is set to expand its sanctions against Russia, reports said. This matter is still a potential geopolitical powder keg and it appears the fuse is now lit. Gold and U.S. Treasuries have and will likely continue to see safe-haven buying amid the escalating Russia-Ukraine conflict.

World stock and financial markets were not overly exercised over the Ukraine-Russia stand-off. Asian and European stock markets were slightly higher Monday and the U.S. stock indexes were also firmer in early electronic trading.

There was no other major, markets-moving economic news from Asia or the European Union overnight.

U.S. economic data due for release Monday is light and includes the monthly Treasury budget statement. The U.S. economic report pace picks up significantly starting Tuesday.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are still 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 firmer in early U.S. trading. Bulls are still in near-term technical control as prices hover near the record high. There remains stiff technical resistance just above present prices. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. 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 bullish early today. Today, shorter-term technical resistance comes in at the May high of 1,886.00 and then at the record high of 1,892.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,874.00 and then at Friday’s low of 1,862.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are higher early today. The bulls have the near-term technical advantage. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at 3,578.00 and then at the May high of 3,605.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,552.50 and then at 3,525.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are higher in early U.S. trading and hovering near the record high. Buy stops likely reside just above technical resistance at 16,600 and then at 16,650. Sell stops likely reside just below technical support at Thursday’s low of 16,555 and then at 16,500. 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: 6.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are weaker early today on profit taking from recent gains that saw prices last week hit a contract high. 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 bearish early today. Shorter-term resistance lies at the overnight high of 135 22/35 and then at 136 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 135 15/32 and then at 135 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 today but hovering not far below a multi-month high. 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 bearish early today. Shorter-term resistance lies at the overnight high of 124.31.5 and then at the March high of 125.06.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.26.0 and then at 124.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The June U.S. dollar index is weaker in early trading, on some chart consolidation following impressive gains late last week. Bulls still have some upside momentum as a bullish key reversal up occurred late last week, to suggest a market bottom is in place. The bears do still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 80.000 and then at 80.065. Shorter-term support is seen at 79.750 and then at 79.600. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

June Nymex crude oil prices are firmer in early U.S. trading, on more short covering. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.58 and then at last week’s high of $101.18. Look for sell stops just below technical support at $100.00 and then at $99.71. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed in overnight trading. Friday’s USDA supply and demand report has been mostly digested and focus is back on weather in the U.S. Corn Belt. Stormy, very wet conditions will persist in parts of the region on Monday, which will further hamper corn and soybean planting progress. However, that same storm system did provide much-needed moisture to dry U.S. wheat regions. The corn and wheat markets are still technically bullish, and soybean bulls have also made a solid rebound.