Jim's Morning Markets Report--May 20

May 20, 2013 02:11 AM
 

Monday, May 20--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

Gold and silver futures early this week are leading a weak
raw commodity sector to the downside. Gold prices are down
for an eighth session in a row, while silver prices are at a
more than 2.5-year low Monday morning. One report overnight
said investors worldwide have dumped around $22 billion
worth of gold exchange traded funds (ETFs) the last nearly
five months. The big rally in the U.S. and Japanese stock
markets, a stronger U.S. dollar, and low inflation
expectations worldwide are major bearish weights on the
metals and entire raw commodity sector at present. The
Japanese yen’s rebound against the U.S. dollar is featured
to start the new trading week. Much of the rebound is likely
short covering after the yen’s major descent the past
several months. Japan’s economy minister said Monday the
downside price action in the yen is about completed. There
is a Bank of Japan monetary policy meeting Tuesday and
Wednesday that will be closely watched by the market place.
However, the BOJ is not expected to make any major policy
changes. Reports from China Monday said Chinese housing
prices rose significantly in April, by up 3.7% and up 2.8%
in two separate readings. This led to ideas Chinese monetary
officials could tighten policy to stem inflationary price
pressures. Such would be a bearish development for the raw
commodity sector. There is more key Chinese economic data
due out later this week. Dallas Fed president Richard Fisher
said on CNBC Monday morning that the Federal Reserve is
presently debating on when to wind down the Fed’s
quantitative easing program. U.S. economic data due for
release Monday is light and includes the Chicago Fed
national activity index.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early today and
hovering near Friday’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
Friday’s record high of 1,665.50 and then at 1,675.00. Buy
stops likely reside just above those levels. Downside
support for active traders today is located at 1,650.00 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 lower early today
and hovering just below Friday’s 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 Friday’s
high of 3,028.25 and then at 3,050.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at 3,000.00 and then at 2,982.50. Sell stops
are likely located just below those levels. Wyckoff's Intra-
Day Market Rating: 5.0.

Dow futures: Prices are slightly lower early today and
hovering near Friday’s record high. Bulls have the solid
overall near-term technical advantage. Buy stops likely
reside just above technical resistance at Friday’s record
high of 15,330 and then at 15,400. Sell stops likely reside
just below technical support at Friday’s low of 15,260 and
then at 15,200. 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: 5.0

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are firmer early today on short
covering. Bears still have the overall near-term technical
advantage. Prices are in a three-week-old downtrend on the
daily bar chart. 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 144 16/32 and then at 145
even. Buy stops likely reside just above those levels.
Shorter-term technical support lies at 144 even and then at
last week’s low of 144 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. 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 132.00.0 and then at 132.08.0. Buy stops
likely reside just above those levels. Shorter-term
technical support lies at the overnight low of 131.22.0 and
then at last 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 weaker in early U.S. trading on a
profit-taking, corrective pullback from solid gains Friday
that saw prices hit a 9.5-month high. Bulls still have the
solid overall near-term technical advantage. Slow
stochastics for the dollar index are bearish early today.
The dollar index finds shorter-term technical resistance at
the overnight high of 84.400 and then at last week’s high of
84.515. Shorter-term support is seen at 84.000 and then at
Friday’s low of 83.865. Wyckoff's Intra Day Market Rating:
4.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today. Bulls have the
slight near-term technical advantage but trading remains
choppy. In June Nymex crude, look for buy stops to reside
just above resistance at $96.00 and then at last week’s high
of $96.45. Look for sell stops just below technical support
at $95.00 and then at $94.50. Wyckoff's Intra-Day Market
Rating: 4.5

GRAINS

Markets were mixed but mostly firmer in overnight trading.
Buying interest in the grains has been limited recently by
the stronger U.S. dollar index and a generally weak raw
commodity sector. Short covering is featured early Monday.
Weather in the U.S. Corn Belt is still a focus for grain
traders. Showers and thunderstorms during the weekend will
further delay planting progress, especially for corn.
However, last week could show record corn-planting progress
when Monday’s USDA crop progress reports are released.
Soybean bulls have recently gained upside near-term
technical momentum. Wheat trading remains choppy and
sideways, but with the bears holding the solid advantage.
 

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