Overnight/Early Morning Developments: The U.S. stock indexes were higher in overnight electronic trading. The U.S. dollar is weaker versus the major currencies in early trading, gold is moderately higher, crude oil is higher and U.S. Treasury Bonds are steady to higher in early dealings. Grains were mostly lower in overnight electronic trading. There were no major geopolitical news events that occurred overnight.
U.S. Economic Reports: On tap today is the GDP report, weekly jobless claims, the Conference Board’s Help Wanted Index, and existing home sales. The GDP figure will get the most market scrutiny. The GDP came in slightly below market expectations, which will give stock indexes and the bond market a boost.
U.S. Stock Indexes: The indexes were higher in overnight electronic trading. Serious near-term technical damage has been inflicted on the stock indexes recently. However, the indexes are now overdone on the downside and due for some short covering to end the week. I still don’t look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.
June S&P 500: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish. Key technical support today is Wednesday’s fresh six-month low of 1,247.00. Sell stops likely reside under this key short-term technical support level. Key upside resistance for active traders today is still the 1,266.90 level–Wednesday’s high. I look for some short-covering support to limit any losses in the market today.
June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish. Key technical support for today is 1,557.50–Wednesday’s low. Sell stops likely reside below that level. On the upside, key short-term resistance is seen at the 1,600.00 level. Buy stops are likely located just above that level. I look for some more short-covering support to limit losses in the market today.
June Dow: This index hit a fresh two-month low Wednesday, but did rebound on short covering. Look for more short-covering support today. I look for the Dow to continue to be the leader on any significant price moves in the index. Key today will be for the bulls to hold technical support at 11,100. Sell stops likely reside just below that level. Bulls would get a technical boost today with a move above short-term resistance at 11,200. Buy stops likely reside just above that level.
U.S. Treasury Bonds and Notes: Both notes and bond prices were lower in overnight trading, but turned around to trade slightly higher after the GDP report was issued this morning. It was just a bit weaker than expected. But bears are still in overall technical control of both bonds and notes.
June U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are still fully bullish. The 4-day moving average is above the 9- and 18-day averages, and the 9-day is above the 18-day. The next short-term upside price objective for the bears is pushing prices above resistance at Wednesday’s high of 107 28/32. Buy stops likely lie just above that level. A push below support 107 even would provide the bears with fresh short-term downside technical momentum. Sell stops likely reside below that level. First resistance is seen at 107 12/32 and then at 107 28/32. First support is seen at 106 30/32 and then at 106 24/32 and then at 106 21/32.
June U.S. T-Notes: Prices are steady in early dealings. Buy stops do likely reside just above resistance at Wednesday’s high of 106.03.5. Shorter-term moving averages are still bullish. The 4-day moving average is above the 9-day average, and the 9-day is also above the 18-day moving average. A move in prices below support at 105.13.5–this week’s low–likely would uncover some sell stops.
Currencies: The June U.S. dollar index is weaker in early morning dealings and the currencies are mostly firmer. The greenback is feeling morning pressure from the weaker-than-expected GDP figure, released this morning. The prevailing price trends in the major currencies are still in place–down for the DX and up for the other currencies. But price action has become choppier. The June U.S. dollar index finds key shorter-term technical support at 84.50 and resistance at 85.07. Key support in the June Euro today is the 1.2752 level–Wednesday’s low. Sell stops likely reside just below that level. Resistance for the Euro is seen at 1.2850. Buy stops likely reside just above that level.
Metals: The metals are mixed but mostly higher in early morning dealings, following big losses Wednesday. Follow-through selling in the metals today would produce some near-term chart damage, to possibly suggest that near-term tops are in place. Thus, today’s price action will be extra important for the near-term market direction. The bull markets are not finished in metals, by any means. Key support for June gold today is Wednesday’s low of $636.00 level. Heavy sell stops likely reside just below that level, while buy stops likely reside just above resistance at $650.00 in June gold.
Energies: Prices are firmer in early electronic dealings, following big losses Wednesday. Look for buy stops to reside just above resistance at $71.00. Look for sell stops just below support at $69.00. I still look for more trading within a range–bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range–including multiple closes below it–would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It’s very likely going to take another geopolitical market “shock” to move crude above $75.00.
Grains: Prices were mostly lower in overnight electronic trading–corn and wheat lower, and soybeans steady. Today’s NOPA crush report is negated for soybeans. Weekly USDA export sales data was deemed neutral, and within market expectations. The shorter-term technical momentum is down for corn and wheat and neutral for soybeans. It would not surprise me to see weakness in grains into early July. However, I’m still looking to buy significant weakness in soybeans and eventually in corn, but will be patient. Grains will continue to closely track the “outside markets” like crude and gold.