Jim's Morning Markets Report--April 16

April 16, 2014 02:01 AM
 

Wednesday, April 16--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The Russia-Ukraine crisis remains in keen focus this week.
The latest developments have seen gunfire in eastern Ukraine
cities, with Russian war planes buzzing the region. The
Ukrainian president has ordered 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 uncertainty regarding how the U.S., the world’s only
military super power, will react to the latest developments
in Ukraine. As a three-day holiday weekend approaches, it
will not be surprising to see the safe-haven assets see more
demand and to see the market place move into a "risk-off"
mode. The Russia-Ukraine crisis could escalate into an
international crisis in a hurry.

Key economic data from China on Wednesday saw the world’s
second-largest economy grow by 7.4%, year-on-year. That
figure was slightly above the 7.3% annual growth rate
expected by forecasters but still the slowest growth rate in
18 months. China construction starts in the first quarter
fell by 25% and sales of homes fell by 7.7% in the same
period. The Asian and European stock markets were supported
on the China GDP news. China is the world’s largest consumer
of raw commodities. The gold market’s plunge on Tuesday was
blamed in part of worries about demand for physical gold
coming out of  China.

U.S. economic data due for release Wednesday includes the
Federal Reserve’s beige book, weekly mortgage applications
survey, new residential construction, industrial production
and capacity utilization, and the weekly DOE liquid energy
stocks report. Fed Chair Janet Yellen also gives a speech in
New York today.

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 higher in early U.S.
trading, on bargain hunting and short covering after prices
hit a two-month low Monday. The shorter-term moving averages
(4-, 9- and 18-day) are still 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 bullish early today. Today,
shorter-term technical resistance comes in at 1,860.00 and
then at 1,867.50. Buy stops likely reside just above those
levels. Downside support for active traders today is located
at the overnight low of 1,840.50 and then at 1,830.00. Sell
stops are likely located just below those levels. Wyckoff's
Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are higher early today on short
covering and bargain hunting after hitting a nine-week low
on Tuesday. The shorter-term moving averages (4- 9-and 18-
day) are still 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 bullish early today. Shorter-term technical resistance
is located at 3,525.00 and then at 3,550.00. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at the overnight low of 3,496.25
and then at 3,475.00. Sell stops are likely located just
below those levels. Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are higher in early U.S. trading today,
on short covering and bargain hunting after prices Monday
hit a two-month low. Buy stops likely reside just above
technical resistance 16,300 and then at 16,350. Sell stops
likely reside just below technical support at 16,205 and
then at 16,150. Shorter-term moving averages are still
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 to bullish early today. Wyckoff's
Intra-Day Market Rating: 6.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower early today on profit
taking after prices hit a contract high Tuesday. 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 30/32 and
then at the contract high of 135 10/32. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 134 11/32 and then at
134 even. 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 profit
taking after hitting a six-week high Monday. 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 124.20.5 and then
at 124.24.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at this week’s
low of 124.11.5 and then at 124.00.0. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 4.0

U.S. DOLLAR INDEX

The June U.S. dollar index is weaker in early trading. The
bears have the firm overall near-term technical advantage.
Slow stochastics for the dollar index are bullish early
today. The dollar index finds shorter-term technical
resistance at the overnight high of 79.915 and then at
80.000. Shorter-term support is seen at overnight low of
79.715 and then at this week’s low of 79.620. Wyckoff's
Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

May Nymex crude oil prices are higher in early U.S. trading
and hit a fresh contract high overnight. Bulls have the
solid overall near-term technical advantage. In May Nymex
crude, look for buy stops to reside just above resistance at
$105.50 and then at $106.00. Look for sell stops just below
technical support at $104.00 and then at the overnight low
of $103.68. Wyckoff's Intra-Day Market Rating: 6.0

GRAINS

Markets were mixed in overnight trading. Soybeans hit a new
for-the-move high, while wheat and corn are slightly lower.
Weather in the central U.S. has been cold and wet the past
few days as U.S. corn planters wait to roll. This is bullish
for corn. The cold U.S. weather and the heightened Russia-
Ukraine tensions are bullish for wheat. Soybeans are seeing
tight U.S. stocks and good worldwide demand. Technically,
wheat bulls have the technical edge. Corn and soybean bulls
have the firm near-term technical advantage.
 

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