Jim's Morning Markets Report--April 3

April 3, 2014 01:28 AM
 

Thursday, April 3--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The European Central Bank is holding its monthly monetary
policy meeting Thursday, including a press conference from
ECB president Mario Draghi. Most, but not all, do not expect
the ECB to make a major move Thursday. However, Draghi’s
comments at his press conference could very well give
guidance on what the ECB will do in the coming weeks. The
European Union’s producer price index dropped 0.2% in
February and was down 1.7% year-on-year, it was reported
Wednesday. 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 puts more pressure on the
ECB to ease its monetary policy in order to jumpstart
economic growth in the EU. Draghi is likely to address this
week’s EU PPI number at his press conference.

The Markit data firm reported Thursday the EU’s composite
purchasing managers index fell to 53.1 in March from 53.3 in
February. A reading above 50.0 suggests expansion. However,
the survey said businesses reduced their prices for the 24th
month in a row.

In other overnight news the Chinese government announced a
$24 billion stimulus plan in the form of railway
improvements. Also, the HSBC China purchasing managers’
index rose to 51.9 in March from 51.0 in February. Asian
equity markets were supported on the China stimulus and PMI
news.

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 Thursday includes the
weekly jobless claims report, the Challenger job cuts
report, the international trade report, the global services
PMI, and the U.S. services PMI.

Wyckoff’s Daily Risk Rating: 5.0 (The geopolitical front is
quiet at present, from a market place perspective.)

(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 and
hovering near Wednesday’s record high in early U.S. trading
today. 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 record
high of 1,886.25 and then at 1,900.00. Buy stops likely
reside just above those levels. Downside support for active
traders today is located at Wednesday’s low of 1,876.25 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 3,655.75 and then at
Wednesday’s low of 3,643.50. 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 and
hovering not far below the record high. Buy stops likely
reside just above technical resistance at the record high of
16,535 and then at 16,600. Sell stops likely reside just
below technical support at Wednesday’s low of 16,487 and
then at 16,420. 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 near steady early today. Bulls
are fading this week. Shorter-term moving averages (4- 9-
18-day) are neutral early today. The 4-day moving average is
below the 9-day and 18-day. The 9-day is above the 18-day
moving average. Oscillators (RSI, slow stochastics) are
neutral to bearish early today. Shorter-term resistance lies
at 132 10/32 and then at Wednesday’s high of 132 20/32. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at this week’s low of 131 26/32 and
then at 131 16/32. Sell stops likely reside just below those
levels. Wyckoff's Intra-Day Market Rating: 5.0
 
June U.S. T-Notes: Prices are slightly higher early today
on tepid short covering after hitting a 10-week low
overnight. 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 neutral to bearish
early today. Shorter-term resistance lies at the overnight
high of 123.00.0 and then at 123.08.0. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 122.26.5 and then at
122.20.0. 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
short covering. Bears still 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 this week’s high of 80.575 and then
at 80.745. Shorter-term support is seen at the overnight low
of 80.335 and then at this week’s low of 80.115. Wyckoff's
Intra Day Market Rating: 5.5

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. In May Nymex crude, look for buy
stops to reside just above resistance at the overnight high
of $99.48 and then at $100.00. Look for sell stops just
below technical support at this week’s low of $98.86 and
then at $98.00. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were firmer in overnight trading, on corrective
bounces from selling pressure Wednesday. Some profit taking
from recent gains is featured in all the grains. In soybeans
and wheat, the bulls need to show power late this week to
avoid some chart damage being inflicted. Traders will
closely examine this morning’s weekly USDA export sales
report.
 

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