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Jim Wyckoff's Morning Report: Awaiting US Employment Report

04 April 2014

GLOBAL - Arguably the most important economic data point of the week and of the month is on deck Friday: the 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 become volatile in the wake of that report—especially if it’s a big miss from expectations. Just ahead of the report many market watchers were thinking the non-farm jobs number would be well above the 200,000 mark. Thus, the highest market volatility after the report would probably be if the jobs number was a big miss to the downside.

There is no other U.S. major economic data due for release Friday.

European and Asian markets were quiet overnight, ahead of the U.S. jobs report.

As the major U.S. stock indexes are this week setting record highs again in their very mature bull market runs, many other asset classes, including the precious metals, have seen their own fortunes dented. Trading and investing is still ultimately a money game. When more money is flowing into the stock market, that means there’s less money to flow into other asset classes. The long-in-the-tooth bull market in U.S. equities will come to an end at some point—and my bias is that it will be sooner rather than later—and at that point money flows will change. Such should favor the hard assets—raw commodities included.

Wyckoff’s Daily Risk Rating: 7.0 (The U.S. jobs report could cause some higher volatility in many markets Friday.)

(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 Thursday’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 bearish early today. Today, shorter-term technical resistance comes in at the record high of 1,887.50 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 and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at 3,650.00 and then at this week’s high of 3,668.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 3,625.00 and then at Thursday’s low of 3,609.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

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 Thursday’s low of 16,455 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 weaker early today. Bulls have faded badly 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 Thursday’s high of 132 12/32 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: 4.5

June U.S. T-Notes: Prices are slightly lower early today and hovering near this week’s 10-week low. 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 Thursday’s high of 123.03.0 and then at 123.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s 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 slightly higher in early trading and hit a five-week high on more short covering. Bears still have the overall near-term technical advantage. However, the bulls have gained upside momentum late this week, to suggest a market bottom is in place. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.695 and then at 80.800. Shorter-term support is seen at the overnight low of 80.590 and then at 80.400. Wyckoff's Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

May Nymex crude oil prices are higher in early U.S. trading. Bulls have the slight overall near-term technical advantage.
In May Nymex crude, look for buy stops to reside just above resistance at the overnight high of $101.13 and then at $101.57. Look for sell stops just below technical support at the overnight low of $100.28 and then at $100.00. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed in overnight trading—soybeans firmer and corn and wheat weaker. Some profit taking from recent gains is featured in all the grains. In wheat, the bulls have faded and need to show fresh power soon. Corn and soybean bulls still have the firm technical advantage. Wet weather in the U.S. Midwest only solidifies notions the corn crop will get a late start on planting this spring.

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