Jim's Morning Markets Report--May 10

May 10, 2013 02:06 AM
 

Friday, May 10--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

In overnight news, the surge in the U.S. dollar against the
other major world currencies, which started in late trading
Thursday and continued into Friday, has caught the attention
of the world market place. The U.S. dollar index, which is a
basket of six major world currencies weighted against the
greenback, hit a fresh two-week high overnight. There were
unfounded rumors swirling late Thursday that a major
financial newspaper would soon report the Federal Reserve is
set to end its quantitative easing program. That helped to
goose the greenback and put strong downside price pressure
on gold and even some pressure on U.S. stock indexes late
Thursday. The dollar has surged strongly against the
Japanese yen the past two days, pushing well below the Yen
100 level. The better U.S. weekly jobless claims data
Thursday morning was one factor supporting the stronger U.S.
currency. The better jobless claims data combined with last
week’s stronger U.S. employment data does push the needle a
little closer to the camp that wants to end the Fed’s big
monthly bond-buying program, also called quantitative
easing. However, it’s still a stretch to conclude there has
been any change in sentiment among Federal Reserve FOMC
members away from the consensus of easy money policies. The
slump in the yen helped drive the Japanese stock market to a
five-year high overnight. Bank of Japan Governor Kuroda said
Friday that markets are determining foreign exchange rates.
That’s a clue the BOJ is not at all alarmed by the yen’s big
decline the past several months. There is a Group of Seven
finance ministers and central bankers meeting held in London
on Friday. Reports overnight said there was a positive
inflow of investor funds into gold-backed exchange traded
funds (ETFs), at 2.5 tons Thursday. The report said that is
the first positive inflow in five weeks. U.S. economic data
due for release Friday is light and includes the treasury
budget statement. Fed Chairman Ben Bernanke speaks Friday
morning at a bank conference in Chicago.--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices slightly higher early today and
hovering near the all-time high. 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-day and 18-day. The
9-day is above the 18-day moving average. Short-term
oscillators (RSI, slow stochastics) are neutral early today.
Today, shorter-term technical resistance comes in at
Thursday’s record high of 1,632.30 and then at 1,640.00. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at Thursday’s
low of 1,620.00 and then at this week’s low of 1,607.40.
Sell stops are likely located just below those levels.
Wyckoff's Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are slightly higher early today
and hovering near a 12-year high. 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-day and 18-day. The
9-day average is above the 18-day. Short-term oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term technical resistance is located at the overnight high
of 2,971.25 and then at Thursday’s new for-the-move high of
2,978.25. Buy stops likely reside just above those levels.
On the downside, short-term support is seen at 2,950.00 and
then at this week’s low of 2,936.50. Sell stops are likely
located just below those levels. Wyckoff's Intra-Day Market
Rating: 5.5.

Dow futures: Prices are firmer early today and hovering near
the record high. Bulls have the solid overall near-term
technical advantage. Buy stops likely reside just above
technical resistance at Thursday’s record high of 15,105 and
then at 15,150. Sell stops likely reside just below
technical support at 15,000 and then at 14,980. Shorter-term
moving averages are bullish early today, as the 4-day moving
average is above the 9-day and 18-day. The 9-day moving
average is above the 18-day moving average. Shorter-term
oscillators (RSI, slow stochastics) are neutral to bearish
early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are lower early today and hit a
fresh five-week low overnight. Bulls are in near-term
technical trouble. 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 below the 18-day moving
average. Oscillators (RSI, slow stochastics) are neutral
early today. Shorter-term resistance lies at 146 even and
then at the overnight high of 146 22/32. Buy stops likely
reside just above those levels. Shorter-term technical
support lies at the overnight low of 145 14/32 and then at
145 even. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 4.0
 
June U.S. T-Notes: Prices are lower early today and hit a
fresh five-week low overnight. Shorter-term moving averages
(4- 9- 18-day) are bearish early today. The 4-day moving
average is below the 9-day and 18-day. The 9-day is below
the 18-day moving average. Oscillators (RSI, slow
stochastics) are neutral early today. Shorter-term
resistance lies at the overnight high of 132.24.5 and then
at 133.00.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 132.08.5 and then at 132.00.0. Sell stops
likely reside just below those levels. Wyckoff's Intra-Day
Market Rating: 4.0

U.S. DOLLAR INDEX

The U.S. dollar index is higher in early U.S. trading and
hit a fresh two-week high overnight. Bulls have the overall
near-term technical advantage and have gained fresh power
late this week. Slow stochastics for the dollar index are
bullish early today. The dollar index finds shorter-term
technical resistance at the overnight high of 83.215 and
then at 83.325. Shorter-term support is seen at 83.000 and
then at the overnight low of 82.765. Wyckoff's Intra Day
Market Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are lower early today, pressured by the
stronger U.S. dollar index. Bulls still have some upside
momentum. A bullish pennant pattern has formed on the daily
bar chart. In June Nymex crude, look for buy stops to reside
just above resistance at $96.00 and then at Thursday’s high
of $96.77. Look for sell stops just below technical support
at $95.00 and then at this week’s low of $94.85. Wyckoff's
Intra-Day Market Rating: 4.0

GRAINS

Markets were mixed in overnight trading, on short covering
and position evening ahead of Friday morning’s monthly USDA
supply and demand report. That report is expected to be
bearish for corn and soybeans. The U.S. Corn Belt saw some
scattered showers the past 24 hours, but is expected to see
drier and warmer weather late this week and next week.
That’s bearish for corn, as a big chunk of the U.S. corn
crop will get planted in the coming days if the weather
forecasts are correct. Soybean futures bulls have gained
some upside momentum late this week, while wheat futures
trading remains choppy.
 

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