Jim's Morning Markets Report--April 1

April 1, 2014 01:44 AM
 

Tuesday, April 1--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, China’s manufacturing purchasing
managers’ index (PMI) rose for the first time in six months,
coming in at 50.3 in March versus 50.2 in February. However,
the similar Markit-HSBC survey showed the China PMI coming
in at 48.0 in March from 48.5 in February. These two reports
ostensibly cancelled each other out.

In the European Union, the Markit manufacturing PMI came in
at 53.0 in March from 53.2 in February. While EU
manufacturing activity has expanded for nine months running,
the worrisome part of the Markit report was that some
manufacturers were starting to drop their prices for their
goods. The European Central Bank is worried about deflation
setting in for the EU and could act soon to provide further
monetary policy stimulus. The monthly ECB monetary policy
meeting is Thursday.

The European and Asian stock markets received upside support
Tuesday, following the lead of the U.S., after perceived
dovish comments from Federal Reserve Chair Janet Yellen on
Monday. Yellen spoke at a gathering in Chicago and said the
U.S. central bank needs to keep interest rates extremely low
to prop up the still very shaky U.S. jobs market.

Traders and investors are awaiting a heavy slate of U.S.
economic data due out this week, capped by the jobs report
on Friday. U.S. economic data due for release Tuesday
includes the weekly Johnson Redbook and Goldman Sachs retail
sales reports, the U.S. manufacturing PMI, construction
spending, the IBD/TIPP economic optimism index, the global
services PMI, domestic auto sales, and the ISM manufacturing
report.

Russia’s annexation of the Crimea region of Ukraine remains
a geopolitical tension, but not quite a front-burner markets
issue at this time.

Wyckoff’s Daily Risk Rating: 5.0 (The Ukraine situation has
for the moment de-escalated.)

(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 firmer in early U.S.
trading today and pushing back up toward the record high
scored in early March. The bulls have the solid overall
near-term technical advantage. The shorter-term moving
averages (4-, 9- and 18-day) are nuetral early today. The 4-
day moving average is above 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 the record
high of 1,880.50 and then at 1,890.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at the overnight low of 1,862.25
and then at Monday’s low of 1,855.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-day Market
Rating: 5.5

Nasdaq index futures: Prices are firmer early today. 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
Monday’s high of 3,610.00 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 3,581.75
and then at Monday’s low of 3,576.00. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 5.5.

Dow futures: Prices are higher in early U.S. trading and hit
a three-week high overnight. Buy stops likely reside just
above technical resistance at 16,450 and then at the March
high of 16,490. Sell stops likely reside just below
technical support at 16,400 and then at 16,373. Shorter-term
moving averages are neutral early today, as the 4-day moving
average is above the 9-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: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower again early today on
more profit taking after hitting a contract high last week.
Bulls still have the overall level 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 133 even and then at the
overnight high of 133 9/32. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
Monday’s low of 132 16/32 and then at 132 even. Sell stops
likely reside just below those levels. Wyckoff's Intra-Day
Market Rating: 4.0
 
June U.S. T-Notes: Prices are weaker early today. Bears
have the overall near-term technical advantage. 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 below the 18-day moving average. Oscillators (RSI,
slow stochastics) are bearish early today. Shorter-term
resistance lies at the overnight high of 123.17.5 and then
at 123.24.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 123.10.0 and then at the March low of
123.02.5. 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 slightly lower in early
trading. Bears have the overall near-term technical
advantage. Slow stochastics for the dollar index are neutral
early today. The dollar index finds shorter-term technical
resistance at 80.400 and then at Monday’s high of 80.575.
Shorter-term support is seen at Monday’s low of 80.115 and
then at 80.000. Wyckoff's Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

May Nymex crude oil prices are weaker in early U.S. trading,
on a profit-taking pullback after hitting a three-week high
last Friday. Bulls still have some upside momentum. In May
Nymex crude, look for buy stops to reside just above
resistance at the overnight high of $101.57 and then at last
week’s high of $102.24. Look for sell stops just below
technical support at $101.00 and then at $100.46. Wyckoff's
Intra-Day Market Rating: 4.5

GRAINS

Markets were mixed but mostly firmer overnight—corn and
soybeans higher and wheat lower. The markets are digesting
Monday’s USDA report, which was bullish for corn the most,
but soybeans also rallied. Both May corn and soybean futures
closed at bullish monthly and quarterly high closes Monday.
The corn and soybean bulls still have the solid overall
near-term technical advantage. Wheat bulls are fading and
need to show fresh power soon.
 

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