Jim's Morning Markets Report--April 11

April 11, 2014 05:11 AM
 

Friday, April 11--Jim Wyckoff's Morning Web Log

* 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
   
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.
 

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