Jim's Morning Markets Report--May 16

May 16, 2013 01:59 AM
 

Thursday, May 16--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Gold is in the spotlight Thursday as prices have been
dropping for the past week. June gold futures on Wednesday
dropped and closed below important psychological support at
$1,400.00 an ounce, to further erode the near-term technical
posture of the yellow metal. Weak long liquidation and fresh
technical short selling in the gold futures market is
featured Thursday morning. Several fundamental factors are
presently stacked against the gold market. Strong world
stock markets are pulling away money from other investment
classes, including safe-haven gold. There is presently a
low-inflation environment in the major world economies, with
even some talk of deflationary price pressures building.
Deflation is the archenemy of all raw commodity markets,
including the precious metals. There has been lackluster
physical gold demand in Asia that is also a bearish weight
on gold recently. Reports overnight said new India
government regulations to thwart gold speculation have
worked to decrease consumer demand in that gold-hungry
nation. Reports Thursday said U.S. government filings show
legendary investor George Soros and the BlackRock fund have
cut their holdings in gold exchange traded funds. A World
Gold Council report Thursday also reaffirmed the exodus of
investor monies from gold ETFs the past few months. In other
news overnight, the European Union on Thursday reported a
record trade surplus in March. That news was a glimmer of
hope that the Euro zone economy may be recovering from its
recession. Federal Reserve Bank of Philadelphia president
Charles Plosser said in Italy Thursday that the central
banks of the world cannot create wealth and said central
banks do not have the tools to fix the present economic and
financial problems in the major industrialized countries. He
said the U.S. should wind down its quantitative easing
program. Plosser’s comments were in line with what many of
my readers already knew: Major central banks of the world
continuing to run their money-printing presses is at best a
short-term bandaid which will eventually create a major
long-term problem. The inflationary implications of the
extremely easy central bank monetary policies of the past
few years is very likely to be a long-term bullish factor
for gold and other raw commodity markets. U.S. economic data
due for release Thursday includes the weekly jobless claims
report, the consumer price index, real earnings, new
residential construction, and the Philadelphia Fed business
survey.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early today and
hovering near Wednesday’s all-time high. Not much new. 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
Wednesday’s high of 1,659.30 and then at 1,675.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at Wednesday’s low of
1,644.20 and then at 1,632.00. 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 poked to another 12-year high overnight. 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 3,008.25 and then at 3,025.00. Buy stops
likely reside just above those levels. On the downside,
short-term support is seen at the overnight low of 2,996.00
and then at Wednesday’s low of 2,982.50. Sell stops are
likely located just below those levels. Wyckoff's Intra-Day
Market Rating: 5.5.

Dow futures: Prices are near steady early today and hovering
near this week’s record high. Bulls have the solid overall
near-term technical advantage. Buy stops likely reside just
above technical resistance at Wednesday’s high of 15,270 and
then at 15,300. Sell stops likely reside just below
technical support at 15,200 and then at Wednesday’s low of
15,160. 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 near steady early today and
hovering not far above this week’s six-week low. Bears are
in near-term technical control. 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 early today. Shorter-term resistance lies at the
overnight high of 144 18/32 and then at 145 even. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 143 30/32 and
then at this week’s low of 143 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 weaker early today
and hovering just above this week’s six-week low. 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 132.00.0 and then at this week’s high of 132.05.5. Buy
stops likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 131.23.0 and
then at this week’s low of 131.16.0. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day Market
Rating: 5.0

U.S. DOLLAR INDEX

The U.S. dollar index is slightly higher in early U.S.
trading and hovering near Wednesday’s 9.5-month high. Bulls
have the solid overall near-term technical advantage. Slow
stochastics for the dollar index are neutral early today.
The dollar index finds shorter-term technical resistance at
Wednesday’s high of 84.220 and then at 84.500. Shorter-term
support is seen at the overnight low of 84.125 and then at
Wednesday’s low of 83.680. Wyckoff's Intra Day Market
Rating: 6.0

NYMEX CRUDE OIL

Crude oil prices are weaker again early today and bulls are
fading. Oil is pressured by the stronger U.S. dollar index
and worries about worldwide demand for oil. In June Nymex
crude, look for buy stops to reside just above resistance at
the overnight high of $94.37 and then at $95.00. Look for
sell stops just below technical support at the overnight low
of $93.23 and then at $93.00. Wyckoff's Intra-Day Market
Rating: 4.5

GRAINS

Markets were slightly higher in overnight trading, on short
covering. Bearish "outside markets" that include a higher
U.S. dollar index and lower crude oil prices this week are
limiting the upside in the grains. The entire raw commodity
sector is under selling pressure this week due to the
surging greenback. Weather in the U.S. Corn Belt is a main
focus for grain traders. Drier and warmer weather has
allowed a big chunk of the corn crop to get planted. In
fact, this week could show record corn-planting progress
when next week’s USDA crop progress reports are released.
Soybean bulls still have some upside technical momentum but
need to show fresh power soon. Wheat trading remains choppy
and sideways, but with the bears holding the advantage.
Traders will closely examine Thursday morning’s weekly USDA
export sales report.
 

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