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Jim Wyckoff's Morning Report: Markets Quiet Ahead of US Employment Record

02 May 2014

GLOBAL - Markets were quieter overnight ahead of what is arguably the most important economic report of the month: the April U.S. employment situation report from the Labor Department.

The key non-farm payrolls number is forecast come in at up around 215,000. In March, the non-farm payrolls figure was up 192,000. Look for many markets to see active trading in the aftermath of the jobs report.

The Russia-Ukraine crisis was ratcheted up another notch Friday as reports said the Ukraine military is conducting major operation against pro-Russia separatists to regain control of an eastern Ukraine city. Gunfire was reported in the city of Slovyansk. Somewhat surprisingly, the markets are taking this news in stride and without much anxiety. But that could change come Monday morning. Gold and other safe-haven assets will likely at least see selling interest limited due to the instability in Ukraine.

In other overnight news, the European Union’s unemployment rate was reported at 11.8% in March—the same as in February. Analysts had forecast the rate to come in at 11.9%. Meantime, the Euro zone manufacturing PMI came in at 53.4 in April from 53.0 in March. A reading above 50.0 indicates expansion. However, in another sign that deflationary pressures could be building the EU, manufacturers reported the prices they paid for their inputs dropped in the latest month, and said the prices they charged for their own products fell, too.

Wyckoff’s Daily Risk Rating: 7.0 (The Russia-Ukraine tensions are still elevated.)

(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 in early U.S. trading. Bulls are in technical control as prices hover not far below the record high. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the record high of 1,892.50 and then at 1,900.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 1,871.50 and then at 1,865.00. 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. The shorter-term moving averages (4- 9-and 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at Thursday’s high of 3,602.50 and then at last week’s high of 3,613.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 3,573.50 and then at 3,560.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 5.5.

Dow futures: Prices are slightly higher in early U.S. trading today and hovering just below the all-time high. Buy stops likely reside just above technical resistance at Thursday’s high of 16,534 and then at the record high of 16,555. Sell stops likely reside just below technical support at Wednesday’s low of 16,460 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 neutral early today. Wyckoff's Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are weaker early today on profit taking after hitting a contract high on Thursday. Bulls still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at the overnight high of 135 20/32 and then at the contract high of 135 28/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 135 even and then at Thursday’s low of 134 22/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 4.5

June U.S. T-Notes: Prices are weaker early today. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 124.20.5 and then at Thursday’s high of 124.25.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.14.5 and then at 124.10.0. 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. The bears 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 79.750 and then at 79.900. Shorter-term support is seen at the overnight low of 79.560 and then at this week’s low of 79.480. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

June Nymex crude oil prices are firmer in early U.S. trading on short covering. In June Nymex crude, look for buy stops to reside just above resistance at the overnight high of $100.09 and then at $100.76. Look for sell stops just below technical support at the overnight low of $99.17 and then at this week’s low of $98.74. Wyckoff's Intra-Day Market Rating: 5.5

GRAINS

Markets were firmer in overnight trading, on corrective bounces from Thursday’s selling pressure. Soybean bulls faded badly Thursday on heavy profit taking. Corn and wheat also saw profit taking Thursday. If the grains close lower today and close at their weekly low closes, that would be a clue the markets have put in near-term tops. For the next few months weather in the central U.S. will be a major market factor for the grains.



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