Jim's Morning Markets Report--April 2

April 2, 2014 01:39 AM
 

Wednesday, April 2--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, the European Union’s producer price index
dropped 0.2% in February and was down 1.7% year-on-year. The
year-on-year decline was the largest since late 2009 and is
yet another element adding to the deflation concerns in the
EU. The PPI report will put more pressure on the European
Central Bank to ease its monetary policy in order to
jumpstart economic growth in the EU. The ECB holds its
monthly monetary policy meeting on Thursday, including a
press conference from ECB president Mario Draghi. Most do
not expect the ECB to make a major move Thursday, but
Draghi’s comments at his press conference could very well
give guidance on what the ECB will do in the coming weeks.

Arguably the most important economic data point of the week
and of the month is Friday’s March U.S. employment report
from the Labor Department. The key non-farm payrolls number
is expected to be up 200,000. Trading in many markets could
be constrained ahead of that report.

U.S. economic data due for release Wednesday includes the
weekly MBA mortgage applications survey, the ADP national
employment report, the ISM New York report on business,
manufacturers’ shipments and inventories and the weekly DOE
energy stocks report.

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 slightly higher in
early U.S. trading today and hit a new all-time high. The
bulls have the solid overall near-term technical advantage.
The shorter-term moving averages (4-, 9- and 18-day) are
bullish early today. The 4-day moving average is above 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 record high of 1,883.50
and then at 1,890.00. Buy stops likely reside just above
those levels. Downside support for active traders today is
located at 1,870.00 and then at Tuesday’s low of 1,862.25.
Sell stops are likely located just below those levels.
Wyckoff's Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are firmer early today. The
shorter-term moving averages (4- 9-and 18-day) are neutral
early today. The 4-day moving average is above the 9-day.
The 9-day average is below the 18-day. Short-term
oscillators (RSI, slow stochastics) are neutral to bullish
early today. Shorter-term technical resistance is located at
3,675.00 and then at 3,700.00. Buy stops likely reside just
above those levels. On the downside, short-term support is
seen at the overnight low of 3,550.25 and then at 3,625.00.
Sell stops are likely located just below those levels.
Wyckoff's Intra-Day Market Rating: 6.0.

Dow futures: Prices are firmer in early U.S. trading. Buy
stops likely reside just above technical resistance at
16,500 and then at the all-time high of 16,535. Sell stops
likely reside just below technical support at Tuesday’s low
of 16,420 and then at 16,400. Shorter-term moving averages
are bullish early today, as the 4-day moving average is
above the 9-day. The 9-day moving average is above the 18-
day moving average. Shorter-term oscillators (RSI, slow
stochastics) are 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 again early today on
more profit taking. Bulls still have the overall level near-
term technical advantage, but are fading. Shorter-term
moving averages (4- 9- 18-day) are neutral early today. The
4-day moving average is below 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 132 20/32 and then
at 133 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the overnight
low of 132 10/32 and then at 132 even. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 4.5
 
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 bearish early
today. The 4-day moving average is below 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 123.13.5 and then
at this week’s high of 123.17.5. Buy stops likely reside
just above those levels. Shorter-term technical support
lies at the March low of 123.02.5 and then at 123.00.0.
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 slightly lower in early
trading. Bears have the overall near-term technical
advantage. Slow stochastics for the dollar index are bearish
early today. The dollar index finds shorter-term technical
resistance at 80.285 and then at 80.400. Shorter-term
support is seen at the overnight low of 80.150 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 follow-through selling pressure from strong losses posted
Tuesday. Bulls are fading quickly. In May Nymex crude, look
for buy stops to reside just above resistance at $100.00 and
then at $100.46. Look for sell stops just below technical
support at $99.00 and then at $98.50. Wyckoff's Intra-Day
Market Rating: 4.5

GRAINS

Markets were mixed but mostly weaker overnight—corn and
wheat weaker and soybeans firmer. Some profit taking from
recent gains is featured. 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. Focus is
on the U.S. planting season for corn and soybeans, the poor
hard red winter wheat crop condition and on U.S. export
demand.
 

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