Jim's Morning Markets Report--April 10

April 10, 2014 01:34 AM
 

Thursday, April 10--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The market place is still digesting Wednesday afternoon’s
release of the minutes of the latest meeting of the Federal
Reserve’s Open Market Committee (FOMC). The U.S. stock
indexes and gold rallied and the U.S. dollar index sold off
in the wake of that report. Traders and investors looked at
the FOMC minutes and decided the last FOMC meeting, combined
with recent remarks from Fed Chair Janet Yellen, paint a
picture that is decidedly more dovish than they had earlier
reckoned. Most now believe it will be a longer period of
time before the Fed starts to raise its interest rates. More
money in the U.S. banking system (quantitative easing) is
bullish for the U.S. stock market and also bullish for raw
commodities due to the inflationary implications.

In overnight news, China’s latest trade data again
disappointed the market place. March exports were down 6.6%
year-on-year, while imports fell 11% in the same period.
Part of the decline in exports was blamed on companies over-
inflating their invoices on exports last year. This news is
a bearish underlying factor for the raw commodity sector, as
China is the world’s largest raw commodity importer.

A Greece government bond auction Thursday has garnered very
good investor demand, reports said. The market place
perceives Greece to be on sounder economic and political
footing—even though a report was released Thursday showing
the Greek unemployment rate at 26.7% in January.

U.S. economic data due for release Thursday includes the
weekly jobless claims report, import and export price
indexes, the monthly Treasury budget statement, and ICSC
chain store sales trends.

The Russia-Ukraine tensions are still on the minds of
traders and investors this week. Pro-Russian demonstrators
in Ukraine have become more active recently. The NATO
secretary-general on Thursday called on Russia to withdraw
its troops from the Ukraine border and stop making trouble.
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.

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
   
U.S. STOCK INDEXES

S&P 500 June e-mini futures: Prices are slightly lower in
early U.S. trading, on a corrective pullback from
Wednesday’s gains. 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 to bullish early today. Today,
shorter-term technical resistance comes in at the overnight
high of 1,867.50 and then at 1,880.50. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at the overnight low of 1,857.50
and then at 1,850.00. 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 on a
corrective pullback from Wednesday’s gains. 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 3,600.00 and then at
3,625.00. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at the overnight
low of 3,577.00 and then at 3,550.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 4.5.

Dow futures: Prices are weaker in early U.S. trading today,
on a corrective pullback from Wednesday’s gains. Buy stops
likely reside just above technical resistance at Wednesday’s
high of 16,366 and then at 16,400. Sell stops likely reside
just below technical support at 16,300 and then at 16,250.
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: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are higher early today and hit a
two-week high following the bullish FOMC minutes. Bulls have
the solid overall near-term technical advantage as prices
hover not far below the contract high. Shorter-term moving
averages (4- 9- 18-day) are neutral early today. The 4-day
moving average is above the 9-day. The 9-day is even with
the 18-day moving average. Oscillators (RSI, slow
stochastics) are bullish early today. Shorter-term
resistance lies at the overnight high of 133 29/32 and then
at 134 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at 133 16/32 and
then at the overnight low of 133 4/32. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 6.0
 
June U.S. T-Notes: Prices are higher early today and hit a
three-week high overnight. 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
bullish early today. Shorter-term resistance lies at the
overnight high of 124.17.0 and then at 124.24.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at 124.10.0 and then at the
overnight low of 124.04.5. Sell stops likely reside just
below those levels. Wyckoff's Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The June U.S. dollar index is near steady in early trading
and hit a fresh three-week low overnight. The bears have
downside near-term technical momentum on their side. Slow
stochastics for the dollar index are bearish early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 79.645 and then at 79.800. Shorter-
term support is seen at the overnight low of 79.480 and then
at the March low of 79.375. Wyckoff's Intra Day Market
Rating: 4.5

NYMEX CRUDE OIL

May Nymex crude oil prices are weaker in early U.S. trading,
on profit taking after hitting a five-week high overnight.
Bulls still have the overall near-term technical advantage
and still have upside momentum. In May Nymex crude, look for
buy stops to reside just above resistance at the overnight
high of $103.81 and then at the March high of $104.48. Look
for sell stops just below technical support at $102.50 and
then at $102.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were mostly weaker in overnight trading. Corn and
soybeans pushed to new for-the-move highs Wednesday, but
then posted low-range closes, which suggests the bulls may
be getting exhausted 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. Traders will closely scrutinize this morning’s weekly
USDA export sales report.
 

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