Jim's Morning Markets Report--April 15

April 15, 2014 01:54 AM
 

Tuesday, April 15--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The Russia-Ukraine crisis is the dominant market theme this
week. The latest development overnight saw the Ukrainian
president order his troops to regain control of the cities
in eastern Ukraine that had been taken over by pro-Russia
rebels. Ukraine government officials have accused Russia of
instigating and even arming the protesters. There is also
uncertainty regarding how the U.S. will react to the latest
developments in the region. This conflict will remain a
major markets-moving factor for at least the rest of this
week.

Surprisingly, the gold market is under strong selling
pressure Tuesday despite the tensions in Ukraine being
ratcheted up at least one notch overnight. Gold had recently
rallied on safe-haven demand due to the geopolitical unrest.
This week’s firmer U.S. dollar index can be explained as one
factor putting downside price pressure on gold Tuesday,
along with profit taking and a corrective pullback from the
recent gains that saw gold prices hit a three-week high on
Monday. The greenback got a further boost on Monday when
better-than-expected U.S. retail sales data was released.
Gold’s price action Tuesday is a reminder of the age-old
saying: "Markets can and will do anything and everything to
frustrate the largest number of traders."

In other overnight news, the key German economic reading,
the Zew economic expectations index, came in at 43.2 in
April, down from 46.6 in March. The decline was more than
what forecasters were expecting and mostly due to worries
about the Ukraine-Russia confrontation. However, the Zew
current conditions index rose to its highest level in three
years in April, coming in at 59.5 versus 51.3 in March.
Germany is the strongest economy in the European Union.

Traders and investors are awaiting key economic data from
China on Wednesday, including its gross domestic product
reading. China is the world’s largest consumer of raw
commodities.

U.S. economic data due for release Tuesday includes the
weekly Johnson Redbook and Goldman Sachs retail sales
reports, the consumer price index, the Empire State
manufacturing survey, Treasury international capital data,
and the NAHB housing market index.

Wyckoff’s Daily Risk Rating: 7.5 (The Russia-Ukraine
tensions are squarely on 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 higher in
early U.S. trading, on a corrective bounce after hitting a
two-month low early Monday. The shorter-term moving averages
(4-, 9- and 18-day) are bearish early today. The 4-day
moving average is below the 9- 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 1,832.00 and
then at 1,840.00. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at the overnight low of 1,821.75 and then at 1,810.00. Sell
stops are likely located just below those levels. Wyckoff's
Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly lower early today.
Prices Monday hit a nine-week low. Bears still have some
downside near-term technical momentum. 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
3,484.00 and then at 3,500.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at 3,450.00 and then at Monday’s low of 3,429.75. Sell
stops are likely located just below those levels. Wyckoff's
Intra-Day Market Rating: 4.5.

Dow futures: Prices are slightly higher in early U.S.
trading today. Prices Monday hit a two-month low. 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 bearish early today, as the 4-day moving
average is below the 9-day and 18-day. The 9-day moving
average is below 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

June U.S. T-Bonds: Prices are slightly lower early today on
more mild profit taking that saw prices hit a contract high
early Monday. Bulls still 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 bearish
early today. Shorter-term resistance lies at the overnight
high of 134 20/32 and then at 135 even. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at 134 even and then at 133 16/32. Sell stops
likely reside just below those levels. Wyckoff's Intra-Day
Market Rating: 4.5
 
June U.S. T-Notes: Prices are lower early today on more
profit taking after hitting a six-week high Monday. Notes
bulls still have some upside technical momentum. 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 bearish early today. Shorter-term
resistance lies at the overnight high of 124.19.0 and then
at 124.24.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at 124.08.0 and
then at 124.00.0. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The June U.S. dollar index is firmer in early trading on
more short covering. The bears still have the overall near-
term technical advantage, but the bulls are on the move this
week. Slow stochastics for the dollar index are bullish
early today. The dollar index finds shorter-term technical
resistance at 80.000 and then at 80.150. Shorter-term
support is seen at overnight low of 79.810 and then at
Monday’s low of 79.620. Wyckoff's Intra Day Market Rating:
5.5

NYMEX CRUDE OIL

May Nymex crude oil prices are lower in early U.S. trading
on profit taking after hitting a contract high Monday. Bulls
still have the solid overall near-term technical advantage.
In May Nymex crude, look for buy stops to reside just above
resistance at the overnight high of $103.65 and then at
$104.00. Look for sell stops just below technical support at
the overnight low of $102.91 and then at $102.50. Wyckoff's
Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed in overnight trading. Weather in the
central U.S. has been cold and wet the past few days,
including some snow on the ground as U.S. corn planters wait
to roll. Presently, corn planting is at about half the
completion rate of normal. This is bullish for corn. The
cold U.S. weather and the heightened Russia-Ukraine tensions
are bullish for wheat. Technically, wheat bulls have now
regained the slight technical edge. Corn and soybean bulls
still have the firm near-term technical advantage.
 

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