Friday, May 3–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
The market place awaits Friday morning’s U.S. jobs report for April. The key non-farm payrolls figure is seen coming in at up 148,000, with the unemployment rate seen unchanged at 7.6%. Given recent weaker U.S. economic data, many market watchers reckoned the jobs report would be on the weak side.Government bond yields in Europe declined Friday, with some yields at record lows, following European Central Bank President Draghi’s comment Thursday that negative ECB deposit rates cannot be ruled out. European Union producer prices fell by 0.2% in March, it was reported Friday, and fell to a three-year low annual rate of up 0.7%. Those numbers would allow the ECB to further ease monetary policy at some point. Traders are still digesting this week’s meetings of the Federal Reserve’s FOMC and the the European Central Bank. The ECB on Thursday cut its key interest rate by 0.25%, to 0.5%, which was expected by many market watchers. ECB’s Draghi at this monthly press conference following the ECB meeting said his central bank could even charge a negative interest rate if economic conditions in the EU warrant. The FOMC statement on Wednesday saw the Fed made no mention of a timeframe for winding down its quantitative easing program and said it could adjust its bond-buying up or down based on U.S. economic conditions. The market place is reading these two meetings’ results as friendly for the raw commodity and stock market sector. The Fed and ECB appear intent on leaving their monetary policies very “easy” for at least the next several months, if not longer. Raw commodities late this week are in a general rally mode following the FOMC and ECB meetings. U.S. economic data due for release Friday includes the jobs report, manufacturers’ shipments and inventories, and the ISM non-manufacturing report on business.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today. Bulls still 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 this week’s high of 1,595.40 and then at 1,600.00. Buy stops likely reside just above those levels. Downside support for active traders today is located this week’s low of 1,574.50 and then at 1,560.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are near steady early today. Bulls still 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 early today. Shorter-term technical resistance is located at Thursday’s high of 2,910.50 and then at 2,925.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,887.00 and then at Thursday’s low of 2,867.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5.
Dow futures: Prices are near steady early today. Bulls still have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at 14,800 and then at the April high of 14,818. Sell stops likely reside just below technical support at 14,700 and then at Thursday’s low of 14,670. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are near steady early today. Bulls still have the solid overall near-term technical advantage. 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 the overnight high of 149 13/32 and then at the contract high of 149 23/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 148 31/32 and then at this week’s low of 148 9/32. 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 today. Bulls still have the solid overall near-term technical advantage. 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 the contract high of 133.25.0 and then at 134.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at 133.16.0 and then at 133.08.0. 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 weaker in early U.S. trading. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.310 and then at Thursday’s high of 82.415. Shorter-term support is seen at the overnight low of 81.990 and then at 81.780. Wyckoff’s Intra Day Market Rating: 4.5
NYMEX CRUDE OIL
Crude oil prices are firmer early today. Trading has been very choppy this week, but bulls have regained some upside momentum. In June Nymex crude, look for buy stops to reside just above resistance at this week’s high of $94.69 and then at $95.00. Look for sell stops just below technical support at $94.00 and then at $93.00. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were firmer in overnight trading. The U.S. jobs report is likely to be an outside force impacting the grains Friday. Rains and cold temperatures, including snow, in the U.S. Corn Belt are bullish for corn, which in turn is the leader of the grains complex, at present. Wheat bulls still have some upside near-term technical momentum on their side. This week’s hard red winter wheat tour showed a U.S. Plains wheat crop in generally bad shape.Meantime, light farmer selling in the U.S. cash market supports soybean futures prices.
