Tuesday, June 4–Jim Wyckoff’s Morning Web Log
* LATEST MARKET DEVELOPMENTS *
In overnight news, the Japanese stock market rebounded Tuesday following recent strong selling pressure. The Chinese stock market remained weak following the downbeat manufacturing data released during the weekend. The Organization for Economic Cooperation and Development reported Tuesday that inflation in the developed countries of the world fell to a 3.5-year low in April. This supports notions the major central banks of the world can keep their foot on the easy-money accelerator at least a little longer. The OECD said the worldwide consumer price index rose by 1.3% on an annualized basis in April, compared to a 1.6% annual rise in March. It’s generally agreed upon by central bankers that annual inflation below 2.0% is not worrisome. It was also reported Tuesday that producer prices in the European Union fell by 0.6% in April, which is the sharpest drop in nearly four years. That news underscores the lack of inflationary pressures in the world at present. Traders and investors are awaiting some major economic news later this week when the European Central Bank holds its monthly meeting on Thursday, followed by Friday’s U.S. employment report. U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the trade deficit report, the ISM New York report on business, and the IDB/TIPP economic optimism index.–Jim
U.S. STOCK INDEXES
S& P 500 futures: Prices are near steady early today. Bulls still have the overall near-term technical advantage but have faded a bit recently. 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 is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at the Monday’s high of 1,638.80 and then at 1,650.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,630.60 and then at Monday’s low of 1,621.20. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0
Nasdaq index futures: Prices are slightly higher early today. Bulls have the overall near-term technical advantage. 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 Monday’s high of 2,995.00 and then at 3,000.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,978.25 and then at 2,961.75. 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. Bulls still have the overall near-term technical advantage, but have faded a bit. Buy stops likely reside just above technical resistance at Monday’s high of 15,235 and then at 15,300. Sell stops likely reside just below technical support at 15,150 and then at last week’s low of 15,100. Shorter-term moving averages are neutral early today, as the 4-day moving average is below the 9-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices are steady early today. Bears have the overall near-term technical advantage as prices hover near the recent contract low. Prices are in a four-week-old downtrend on the daily bar chart. 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 neutral early today. Shorter-term resistance lies at the overnight high of 140 23/32 and then at 141 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at 140 even and then at Monday’s low of 139 13/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0 September U.S. T-Notes: Prices are near steady early today. Bears have the solid near-term technical advantage. 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 neutral early today. Shorter-term resistance lies at the overnight high of 129.19.0 and then at Monday’s high of 129.30.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 129.08.0 and then at 129.00.0. 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 slightly higher in early U.S. trading on tepid short covering from recent selling pressure. Bulls have faded recently. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 82.915 and then at 83.000. Shorter-term support is seen at the overnight low of 82.630 and then at Monday’s low of 82.455. Wyckoff’s Intra Day Market Rating: 5.0
NYMEX CRUDE OIL
Crude oil prices are lower early today. The crude bulls have faded. In July Nymex crude, look for buy stops to reside just above resistance at the overnight high of $93.39 and then at $94.00. Look for sell stops just below technical support at $92.40 and then at $92.00. Wyckoff’s Intra-Day Market Rating: 4.5
GRAINS
Markets were lower in overnight trading. The key “outside markets” are bearish for the grains early Tuesday morning as the U.S. dollar index is firmer and crude oil prices are weaker. Soybean bulls still have good upside near-term technical momentum. Corn trading remains choppy, with stiff overhead chart resistance holding firm. Recent wet U.S. Corn Belt weather remains a market feature and has now caused serious planting delays in soybeans. Wheat futures prices are somewhat following corn and beans, but the wheat bears remain in technical control.
