* LATEST MARKET DEVELOPMENTS *

European and Asian stock markets were under pressure Friday, following the sharp plunge on Wall Street Thursday. Biotechnology and internet stocks in the U.S. were hardest hit on Thursday, but nearly all shares suffered. U.S. stock indexes were slightly lower Friday morning, before the daytime opens in New York. The mature bull market run in equities has sputtered in recent weeks, even though some indexes have touched new record highs. If the U.S. stock indexes start to come down from their lofty price levels and begin to trend lower, such would be a bullish factor for the raw commodity markets, including precious metals. One main reason for this would be the money coming out of the stock market would seek another asset class—likely hard assets like commodities, after having been parked in “paper” assets like stocks.

In other overnight news, China’s inflation rate came in slightly below expectations, it was reported Friday. The consumer price index fell 0.5% in March, month-on-month and was up 2.4% year-on-year. Also, Chinese premiere Li Keqiang reportedly said his country’s economic growth could be higher or lower than the 7.5% annual growth target. That led some to speculate China’s growth rate this year will not meet the government’s projection.

In the European Union, consumer prices in Spain fell in March for the first time since 2009, at down 0.2% year-on-year. This only adds to concerns the European Union, overall, is teetering on the verge of dangerous price deflation.

U.S. economic data due for release Friday includes the producer price index and the University of Michigan consumer sentiment survey.

The Russia-Ukraine tensions are still on the minds of traders and investors heading into the weekend. Pro-Russian demonstrators in Ukraine have become more active recently. The NATO secretary-general on Friday said Russian troops massed on the Ukrainian border appear ready to move on short notice. This situation could flare up quickly and once again become a geopolitical flash point.  Gold would likely see safe-haven demand increase on any escalation of this conflict.The U.S. dollar index has taken a beating this week and fell to a three-week low. The eroding greenback is a bullish underlying factor for the raw commodity sector, including the precious metals.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are moving closer to the front burner of the market place.)

(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 slightly lower in early U.S. trading, after hitting a three-week low on Thursday. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9- 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 the overnight high of 1,832.00 and then at 1,845.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,823.75 and then at 1,815.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today after hitting a two-month low on Thursday. Bulls are fading again. The shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,485.00 and then at 3,500.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 3,468.00 and then at 3,450.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Dow futures: Prices are slightly lower in early U.S. trading today after hitting a three-week low on Thursday. Buy stops likely reside just above technical resistance 16,150 and then at 16,200. Sell stops likely reside just below technical support at 16,050 and then at 16,000. Shorter-term moving averages are neutral early today, as the 4-day moving average is below 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 bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are slightly lower early today on mild profit taking from Thursday’s gains that saw prices hit a contract high. Bulls 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at Thursday’s contract high of 134 19/32 and then at 135 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 134 3/32 and then at 134 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 June U.S. T-Notes: Prices are slightly lower early today on mild profit taking after hitting a nearly four-week high on Thursday. Notes bulls have gained good upside technical momentum recently. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 124.22.0 and then at Thursday’s high of 124.29.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.15.0 and then at the 124.08.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly higher in early trading after hitting a four-week low Thursday. The bears have downside near-term technical momentum on their side. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at Thursday’s high of 79.645 and then at 79.800. Shorter-term support is seen at the contract low of 79.375 and then at 79.250. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

May Nymex crude oil prices are near steady in early U.S. trading. Bulls still have the overall near-term technical advantage and still have some upside momentum. In May Nymex crude, look for buy stops to reside just above resistance at this week’s high of $103.81 and then at the March high of $104.48. Look for sell stops just below technical support at $103.00 and then at $102.50. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were narrowly mixed in overnight trading. Corn and soybeans pushed to new for-the-move highs this week, but the bulls could be running out of gas after their recent upside price assaults. In wheat, the bears have downside momentum to suggest that market has topped out, at least for the near term. U.S. corn planting progress will likely take center stage next week.