Wednesday, May 15–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, the Euro currency fell and the U.S. dollar index rose to a nine-month high on news of a weaker-than-expected European Union gross domestic product figure. For the sixth quarter in a row, EU GDP came in at negative growth. First-quarter EU GDP came in at minus 0.2%, compared with the fourth-quarter of last year. The GDP data from the EU suggests the European Central Bank will keep its pedal to the metal on its aggressive easing of its monetary policy. Meantime, the Bank of England Wednesday said the U.K. economy is in recovery, but it will be a very slow process that could force the BOE to implement more monetary stimulus measures. In Asia, the Japan Nikkei stock index pushed to a five-year high as the yen continues its descent versus the other major world currencies. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, the Empire State manufacturing survey, Treasury international capital data, industrial production and capacity utilization, the weekly DOE energy stocks report, and the NAHB housing market index.–Jim
U.S. STOCK INDEXES
S&P 500 futures: Prices are near steady early today and hovering near Tuesday’s all-time high. Bulls 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 1,650.00 and then at 1,660.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,632.00 and then at this week’s low of 1,621.60. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5
Nasdaq index futures: Prices are slightly weaker early today but not far below Tuesday’s 12-year high. 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 Tuesay’s high of 3,005.00 and then at 3,025.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,987.50 and then at Tuesday’s low of 2,971.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0.
Dow futures: Prices are near steady early today and hovering near Tuesday’s record high. Bulls still have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at Tuesday’s high of 15,180 and then at 15,200. Sell stops likely reside just below technical support at 15,100 and then at this week’s low of 15,020. 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 neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
June U.S. T-Bonds: Prices are lower early today and hovering near this week’s six-week low. Bears are in near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 144 even and then at the overnight high of 144 6/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 143 16/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 June U.S. T-Notes: Prices are weaker early today and hit a six-week low overnight. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at Tuesday’s high of 131.24.5 and then at 132.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.16.0 and then at 131.10.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5
U.S. DOLLAR INDEX
The U.S. dollar index is solidly higher in early U.S. trading and hit a fresh 9.5-month high overnight. Bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 84.250 and then at 84.500. Shorter-term support is seen at 84.00 and then at the overnight low of 83.680. Wyckoff’s Intra Day Market Rating: 7.0
NYMEX CRUDE OIL
Crude oil prices are lower again early today and bulls are fading again. Oil is pressured by the stronger U.S. dollar index and worries about worldwide demand for oil. In June Nymex crude, look for buy stops to reside just above resistance at $94.00 and then at the overnight high of $94.43. Look for sell stops just below technical support at $92.50 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 4.0
GRAINS
Markets were weaker in overnight trading, on bearish “outside markets” that include a sharply higher U.S. dollar index and lower crude oil prices. In fact, the entire raw commodity sector is under selling pressure Wednesday due to the surging greenback. Weather in the U.S. Corn Belt is still the main focus for grain traders. Drier and warmer weather are in the forecast in the coming days, which will allow a big chunk of the corn crop to get planted. However, the progress is still behind normal. Soybean bulls still have some upside technical momentum on their side, while wheat trading has been choppy and sideways, but with the bears holding the advantage.
