Friday, April 5–Jim Wyckoff’s Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Traders and investors are awaiting Friday morning’s release of the U.S. Labor Department’s employment situation report, which is arguably the most important U.S. economic report of the month. The consensus forecast for that report calls for the key non-farm payrolls figure to have risen by around 200,000 in March, with the overall unemployment rate unchanged from the previous month, at 7.7%. The weaker-than-expected ADP national employment report released on Wednesday has many analysts ratcheting back expectations for Friday’s Labor Department jobs report. In overnight news, the Japanese yen hit a 3.5-year low against the U.S. dollar following Thursday’s conclusion of the Bank of Japan meeting, which saw the central bank implement more aggressive monetary stimulus measures. The Euro currency was supported Friday by a better-than-expected report on German manufacturing orders, which rose 2.3% in February. However, Euro zone retail sales dropped in February by 0.3%. North Korea and its bellicose rhetoric toward the U.S. and South Korea this week continues to attract the attention of the market place. North Korea has publicly threatened to attack the U.S. with nuclear missiles and is also threatening South Korea. The U.S. is taking North Korea’s threats seriously and has dispatched military assets to the region surrounding North Korea. The market place is digesting this news fairly well this week. However, that could change very quickly if the North Korea situation turns from just rhetoric to military conflict. Other U.S. economic data due for release Friday includes the international trade report and consumer installment credit.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today on profit taking. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,554.80 and then at this week’s high of 1,568.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at last week’s low of 1,539.20 and then at 1,529.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5Nasdaq index futures: Prices are lower early today. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. 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 bearish early today. Shorter-term technical resistance is located at the overnight high of 2,785.50 and then at 2,800.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,748.25 and then at 2,725.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0.

Dow futures: Prices are lower early today on profit taking. Bulls still have the overall near-term technical advantage. Sell stops likely reside just below technical support at 14,400 and then at 14,350. Buy stops likely reside just above technical resistance at 14,500 and then at Thursday’s high of 14,550. Shorter-term moving averages are bullish early today, 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 today. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are higher early today and hit a three-month high overnight. Bulls have the near-term technical advantage and are having a very good week.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 bullish early today. Shorter-term resistance lies at the overnight high of 146 27/32 and then at 147 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 146 16/32 and then at the overnight low of 146 1/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

June U.S. T-Notes: Prices are firmer early today and hit a fresh four-month high overnight. Bulls have upside near-term technical momentum. 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 bullish early today. Shorter-term resistance lies at the contract high of 133.01.0 and then at 133.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.20.5 and then at 132.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The U.S. dollar index is slightly higher in early U.S. trading. The greenback bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 83.010 and then at 83.245. Shorter-term support is seen at this week’s low of 82.645 and then at 82.500. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today on follow-through pressure from sharp losses posted on Wednesday and Thursday. Bears have gained good downside technical momentum this week, to suggest still more downside price pressure in the near term. In May Nymex crude, look for buy stops to reside just above resistance at the overnight high of $93.57 and then at $94.00. Look for sell stops just below technical support at the overnight low of $92.71 and then at Thursday’s low of $92.12. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were mostly lower overnight. Bears further clamped down on the grain futures markets Thursday, with new for-the-move lows in corn and soybeans. It would not surprise me to see the grain market bears remain in command for at least the next two weeks, at which time any persistent, wet weather in the U.S. Corn Belt could start to support the bulls, due to planting delays.