OVERNIGHT/EARLY MORNING DEVELOPMENTS

The U.S. stock indexes were weaker in overnight electronic trading. The U.S. dollar is slightly stronger versus the major currencies in early trading, gold is slightly lower, crude oil is lower and U.S. Treasury Bonds are slightly higher in early dealings. Grains were lower in overnight electronic trading. There were no major, market-moving geopolitical news events that occurred overnight.

Wednesday, May 31--Jim Wyckoff's Early Morning Web Log

U.S. ECONOMIC REPORTS

On tap today is the ICSC store sales index, Redbook retail sales index, the Chicago Purchasing Managers index and the FOMC minutes release from the May 10 meeting.

U.S. STOCK INDEXES

The indexes were higher in overnight electronic trading following strong losses Tuesday. However, Tuesday's price action produced more near-term chart damage to suggest there may still be some down-trending price action in the near term. But I don't look for any strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the normally quieter summer months.

September S&P 500: The shorter-term moving averages (9- and 18-day) are still bearish. However, the 4-day moving average has moved above the 9-day and produce a minor buy signal. But Tuesday's big down day did produce near-term chart damage. Now, key shorter-term technical support today comes in at Monday's low of 1,270.00. Sell stops likely reside just under this price level. Major support is seen at the May low of 1,259.50. Key upside resistance for active traders today is the 1,280.00 level. Buy stops are likely just above that price level.

September Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still bearish. Tuesday's big downside price action produced more near-term chart damage. Key shorter-term technical support for today is the May low of 1,1583.00. Heavy sell stops likely reside below that level. On the upside, short-term resistance is seen at the 1,620.00 level. Buy stops are likely located just above that level.

September Dow: Chart damage was inflicted with Tuesday's big losses. The next major shorter-term downside objective for the bears is closing prices below solid support at the May low of 11,150 price level. Heavy sell stops likely reside just below that level. Buy stops likely reside just above shorter-term technical resistance at Tuesday's high of 11,330.

U.S. TREASURY BONDS AND NOTES

Both notes and bond prices were firmer in overnight and early open-outcry trading in Chicago. However, bears are still in overall near-term technical control of both bonds and notes. Rallies are still selling opportunities at this point.

September U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are again turning bearish. The 4-day moving average has moved below the 9-day average. The next short-term upside price objective for the bears today is pushing prices above shorter-term resistance at 107 even. Buy stops likely lie just above that level. A push below support at last week's low of 106 13/32 would provide the bears with fresh short-term downside technical momentum. Sell stops likely reside just below that level.

September U.S. T-Notes: Prices are firmer in early morning dealings. Buy stops likely reside just above shorter-term resistance at 105.16.5. Shorter-term moving averages are turning bearish. The 4-day moving average has just moved below the 9-day average today. A move in prices below shorter-term support at last week's low of 105.04.0 likely would uncover some sell stops just below that level.

CURRENCIES

The September U.S. dollar index is slightly higher in early morning dealings and the currencies are slightly lower. Prices are just correcting a bit today, following a big sell off in the dollar index Tuesday and big gains in the other currencies. Price action has become choppier in the currencies, heading into summertime. Recent price trends (down on the DX and up in the currencies) have now weakened a bit, but are still in place. The September U.S. dollar index finds key shorter-term technical support at Tuesday's low of 83.65 and resistance at last week's high of 84.90. Key shorter-term technical support in the September Euro today is located at 1.2900. Sell stops likely reside just below that level. Shorter-term technical resistance for the Euro is seen at 1.3000--Tuesday's high. Buy stops likely reside just above that key price level.

METALS

The metals are narrowly mixed in early morning dealings, but do feel a bit "heavy" today, following strong gains in gold and silver Tuesday. A firmer dollar index today will help out the metals bears. Key shorter-term technical support for August gold today is the $650.00 level. Sell stops likely reside just below that level, while buy stops likely reside just above shorter-term resistance at $671.50 in August gold--Tuesday's high.

ENERGIES

Prices are lower in early electronic dealings, on news that the U.S. may not be aggressive in using military action against Iran if the stalemate over nuclear enrichment in Iran continues. The weekly DOE energy report is delayed by a day, until Thursday, due to the Memorial Day holiday. In July crude oil, look for buy stops to reside just above resistance at Tuesday's high of $72.75. Look for sell stops just below support at $71.00. I still look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

GRAINS

Prices were solidly lower in overnight electronic trading, following weekly USDA crop progress reports that showed the corn and soybean plants off to a very good start early in the growing season. Wheat was also under pressure, despite the weekly USDA reports showing further deterioration of the U.S. HRW wheat crop. Weather forecasts are heating up for the Corn Belt. However, if the weather does behave normally and is benign, then it still would not surprise me to see weakness in grains into early July. Grains will continue to closely track the "outside markets" like crude and gold.

Posted by Jim Wycoff at 08:52 AM | Permalink | Comments (0) | TrackBacks (0)

OVERNIGHT/EARLY MORNING DEVELOPMENTS

The U.S. stock indexes were weaker in overnight electronic trading. The U.S. dollar is sharply lower versus the major currencies in early trading, gold is moderately higher, crude oil is higher and U.S. Treasury Bonds are steady in early dealings. Grains were higher in overnight electronic trading. There were no major geopolitical news events that occurred overnight or over the long U.S. holiday weekend.

U.S. ECONOMIC REPORTS

On tap today is the Conference Board's Consumer Confidence Index, the Dallas Federal Reserve production index, and the Chicago Federal Reserve manufacturing index.

U.S. STOCK INDEXES

The indexes were weaker in overnight electronic trading following a long holiday weekend and following good gains Friday. Prices last Friday saw weekly high closes, which does give the bulls some fresh technical momentum heading into the new trading week. That is also an early clue that near-term lows could be in place in the indexes. I still don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

September S&P 500: The shorter-term moving averages (4- 9- and 18-day) are still bearish. However, the 4-day moving average is now poised to push above the 9-day and produce a minor buy signal--possibly today. Key shorter-term technical support today is Fridays' low of 1,287.50. Sell stops likely reside under this price level. Key upside resistance for active traders today is the 1,300.00 level. Buy stops are likely just above that price level.

September Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still bearish, but it appears the 4-day will cross above the 9-day today to produce a minor buy signal. Key shorter-term technical support for today is 1,1612.00. Sell stops likely reside below that level. On the upside, short-term resistance is seen at the 1,640.00 level. Buy stops are likely located just above that level.

June Dow: This index appears to have a near-term low in place. The next major shorter-term upside objective for the bulls is closing prices above solid resistance at the 11,460 price level. Sell stops likely reside just below shorter-term chart support at Friday's low of 11,320. Buy stops likely reside just above shorter-term technical resistance at 11,400.

U.S. TREASURY BONDS AND NOTES

Both notes and bond prices were steady in overnight trading, but turned slightly lower in early open-outcry trading in Chicago. Bears are still in overall technical control of both bonds and notes. Rallies are still selling opportunities at this point.

September U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are still bullish, but are turning south again. The 4-day moving average today is poised to move below the 9-day average. The next short-term upside price objective for the bears today is pushing prices above shorter-term resistance at 107 even. Buy stops likely lie just above that level. A push below support at last week's low of 106 13/32 would provide the bears with fresh short-term downside technical momentum. Sell stops likely reside just below that level.

September U.S. T-Notes: Prices are weaker in early morning dealings. Buy stops do likely reside just above shorter-term resistance at Friday's high of 105.16.5. Shorter-term moving averages are still bullish but are now turning back down. The 4-day moving average is poised to move below the 9-day average today. A move in prices below shorter-term support at last week's low of 105.04.0 likely would uncover some sell stops just below that level.

CURRENCIES

The September U.S. dollar index is sharply lower in early morning dealings and the currencies are solidly higher. Price action has become choppier in the currencies, heading into summertime. Recent price trends (down on the DX and up in the currencies) have now weakened, but are still in place. The September U.S. dollar index finds key shorter-term technical support at today's low of 83.89 and resistance at today's high of 84.62. Key shorter-term technical support in the September Euro today is today's low of 1.2835. Sell stops likely reside just below that level. Shorter-term technical resistance for the Euro is seen at 1.2968--today's high. Buy stops likely reside just above that level.

METALS

The metals are modestly higher in early morning dealings. Bulls last week made a good recovery in the metals, with last week's lows now very strong technical support. The weaker dollar today will help out the metals bulls. Key shorter-term technical support for August gold today is the of $650.00 level. Sell stops likely reside just below that level, while buy stops likely reside just above shorter-term resistance at $665.00 in August gold.

ENERGIES

Prices are stronger in early electronic dealings, as focus is again on Iran and its nuclear ambitions, and as the hurricane season starts in the U.S. this week. In July crude oil, look for buy stops to reside just above resistance at $73.00. Look for sell stops just below support at $71.00. I still look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

GRAINS

Prices were higher in overnight electronic trading, following a hot, windy and dry weekend in the Corn Belt. Weather forecasts are heating up for the Corn Belt as we start the new trading week. However, if the weather does behave normally and is benign, then it still would not surprise me to see weakness in grains into early July. Grains will continue to closely track the "outside markets" like crude and gold.

Posted by Jim Wycoff at 08:51 AM | Permalink | Comments (0) | TrackBacks (0)

OVERNIGHT/EARLY MORNING DEVELOPMENTS

The U.S. stock indexes were weaker in overnight electronic trading. The U.S. dollar is firmer versus the major currencies in early trading, gold is moderately higher, crude oil is higher and U.S. Treasury Bonds are steady in early dealings. Grains were higher in overnight electronic trading. There were no major geopolitical news events that occurred overnight.

Friday, May 26--Jim Wyckoff's Early Morning Web Log

U.S. ECONOMIC REPORTS

On tap today are personal income and spending data and the University of Michigan consumer sentiment survey. Some markets, including the bond market, close early today ahead of the Memorial Day holiday weekend. U.S. markets are closed Monday.

U.S. STOCK INDEXES

The indexes were weaker in overnight electronic trading but then turned higher early this morning. Prices saw a good short-covering bounce Thursday, and if weekly high closes can be scored in the indexes today, then that would be an early clue that near-term lows could be in place. Serious near-term technical damage has been inflicted on the stock indexes recently. I still don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) are still bearish. However, the 4-day moving average is now poised to push above the 9-day and produce a minor buy signal. That could occur today. Key shorter-term technical support today the 1,266.00 level. Sell stops likely reside under this price level. Sell stops are also likely located just below chart support at Thursday's low of 1,258.00. Key upside resistance for active traders today is the 1,280.00 level. Buy stops are likely just above that price level. Look for quieter, pre-holiday trading today.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still bearish, but it appears the 4-day will cross above the 9-day today to produce a minor buy signal. Key shorter-term technical support for today is 1,580.00--Wednesday's low. Sell stops likely reside below that level. On the upside, short-term resistance is seen at the 1,620.00 level. Buy stops are likely located just above that level. I look for some more short-covering support to limit losses in the market today.

June Dow: This index hit a fresh two-month low Wednesday, but has rebounded on short covering. Bulls look strong to end the week, which hints that a near-term low is in place. Sell stops likely reside just below shorter-term chart support at 11,200. Buy stops likely reside just above shorter-term technical resistance at 11,300.

U.S. TREASURY BONDS AND NOTES

Both notes and bond prices were steady in overnight trading, but turned slightly higher after the personal income report was issued this morning. But bears are still in overall technical control of both bonds and notes. Rallies are still selling opportunities at this point.

June U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are now turning bearish. The 4-day moving average today is poised to move below the 9-day average. The next short-term upside price objective for the bears today is pushing prices above shorter-term resistance at 107 even. Buy stops likely lie just above that level. A push below support 106 16/32 would provide the bears with fresh short-term downside technical momentum. Sell stops likely reside below that level.

June U.S. T-Notes: Prices are steady in early dealings. Buy stops do likely reside just above shorter-term resistance at 105.24.0. Shorter-term moving averages are now turning bearish. The 4-day moving average is poised to move below the 9-day average. A move in prices below shorter-term support at 105.10.0 likely would uncover some sell stops.

CURRENCIES

The June U.S. dollar index is near steady in early morning dealings and the currencies are mostly near unchanged, too. The DX and the currencies appear to be in a "pause" mode, which suggests the prevailing price trends are still sound and about to continue--down for the DX and up for the other currencies. But price action has become choppier. The June U.S. dollar index finds key shorter-term technical support at 84.50 and resistance at 85.07. Key shorter-term technical support in the June Euro today is the 1.2800 level. Sell stops likely reside just below that level. Resistance for the Euro is seen at 1.2855. Buy stops likely reside just above that level.

METALS

The metals are modestly higher in early morning dealings, following good gains Thursday. Bulls have made a good recovery this week in the metals, with this week's lows very strong technical support. Bulls appear to be finishing the week in strong fashion. Key shorter-term technical support for June gold today is this week's low of $636.00 level. Heavy sell stops likely reside just below that level, while buy stops likely reside just above shorter-term resistance at $660.00 in June gold.

ENERGIES

Prices are weaker in early electronic dealings, following big gains Thursday. In July crude oil, look for buy stops to reside just above resistance at $71.70. Look for sell stops just below support at $69.50. I still look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

GRAINS

Prices were higher in overnight electronic trading. Bulls look to get off to a strong start today, but key will be how the markets close. Today's price action will be extra important heading into the long holiday weekend. Heat is building back into the Corn Belt, which is short-term bearish for corn and beans, but could be longer-term bullish. It still would not surprise me to see weakness in grains into early July--especially if weather remains benign. However, I'm still looking to buy significant weakness in soybeans and eventually in corn, but will be patient. Grains will continue to closely track the "outside markets" like crude and gold.

Posted by Jim Wycoff at 09:12 AM | Permalink | Comments (0) | TrackBacks (0)

Overnight/Early Morning Developments: The U.S. stock indexes were higher in overnight electronic trading. The U.S. dollar is weaker versus the major currencies in early trading, gold is moderately higher, crude oil is higher and U.S. Treasury Bonds are steady to higher in early dealings. Grains were mostly lower in overnight electronic trading. There were no major geopolitical news events that occurred overnight.

U.S. Economic Reports: On tap today is the GDP report, weekly jobless claims, the Conference Board's Help Wanted Index, and existing home sales. The GDP figure will get the most market scrutiny. The GDP came in slightly below market expectations, which will give stock indexes and the bond market a boost.

U.S. Stock Indexes: The indexes were higher in overnight electronic trading. Serious near-term technical damage has been inflicted on the stock indexes recently. However, the indexes are now overdone on the downside and due for some short covering to end the week. I still don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish. Key technical support today is Wednesday's fresh six-month low of 1,247.00. Sell stops likely reside under this key short-term technical support level. Key upside resistance for active traders today is still the 1,266.90 level--Wednesday's high. I look for some short-covering support to limit any losses in the market today.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish. Key technical support for today is 1,557.50--Wednesday's low. Sell stops likely reside below that level. On the upside, key short-term resistance is seen at the 1,600.00 level. Buy stops are likely located just above that level. I look for some more short-covering support to limit losses in the market today.

June Dow: This index hit a fresh two-month low Wednesday, but did rebound on short covering. Look for more short-covering support today. I look for the Dow to continue to be the leader on any significant price moves in the index. Key today will be for the bulls to hold technical support at 11,100. Sell stops likely reside just below that level. Bulls would get a technical boost today with a move above short-term resistance at 11,200. Buy stops likely reside just above that level.

U.S. Treasury Bonds and Notes: Both notes and bond prices were lower in overnight trading, but turned around to trade slightly higher after the GDP report was issued this morning. It was just a bit weaker than expected. But bears are still in overall technical control of both bonds and notes.

June U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are still fully bullish. The 4-day moving average is above the 9- and 18-day averages, and the 9-day is above the 18-day. The next short-term upside price objective for the bears is pushing prices above resistance at Wednesday's high of 107 28/32. Buy stops likely lie just above that level. A push below support 107 even would provide the bears with fresh short-term downside technical momentum. Sell stops likely reside below that level. First resistance is seen at 107 12/32 and then at 107 28/32. First support is seen at 106 30/32 and then at 106 24/32 and then at 106 21/32.

June U.S. T-Notes: Prices are steady in early dealings. Buy stops do likely reside just above resistance at Wednesday's high of 106.03.5. Shorter-term moving averages are still bullish. The 4-day moving average is above the 9-day average, and the 9-day is also above the 18-day moving average. A move in prices below support at 105.13.5--this week's low--likely would uncover some sell stops.

Currencies: The June U.S. dollar index is weaker in early morning dealings and the currencies are mostly firmer. The greenback is feeling morning pressure from the weaker-than-expected GDP figure, released this morning. The prevailing price trends in the major currencies are still in place--down for the DX and up for the other currencies. But price action has become choppier. The June U.S. dollar index finds key shorter-term technical support at 84.50 and resistance at 85.07. Key support in the June Euro today is the 1.2752 level--Wednesday's low. Sell stops likely reside just below that level. Resistance for the Euro is seen at 1.2850. Buy stops likely reside just above that level.

Metals: The metals are mixed but mostly higher in early morning dealings, following big losses Wednesday. Follow-through selling in the metals today would produce some near-term chart damage, to possibly suggest that near-term tops are in place. Thus, today's price action will be extra important for the near-term market direction. The bull markets are not finished in metals, by any means. Key support for June gold today is Wednesday's low of $636.00 level. Heavy sell stops likely reside just below that level, while buy stops likely reside just above resistance at $650.00 in June gold.

Energies: Prices are firmer in early electronic dealings, following big losses Wednesday. Look for buy stops to reside just above resistance at $71.00. Look for sell stops just below support at $69.00. I still look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

Grains: Prices were mostly lower in overnight electronic trading--corn and wheat lower, and soybeans steady. Today's NOPA crush report is negated for soybeans. Weekly USDA export sales data was deemed neutral, and within market expectations. The shorter-term technical momentum is down for corn and wheat and neutral for soybeans. It would not surprise me to see weakness in grains into early July. However, I'm still looking to buy significant weakness in soybeans and eventually in corn, but will be patient. Grains will continue to closely track the "outside markets" like crude and gold.

Posted by Jim Wycoff at 09:00 AM | Permalink | Comments (0) | TrackBacks (0)

Overnight Developments: The U.S. stock indexes were narrowly mixed in overnight electronic trading. The U.S. dollar is firmer versus the major currencies in early trading, gold is solidly lower, crude oil is solidly lower and U.S. Treasury Bonds are solidly higher in early dealings. Grains were mixed in overnight electronic trading. There were no major geopolitical news events that occurred overnight. However, fresh bird flu cases have garnered headlines today.

U.S. Economic Reports: On tap today are durable goods orders, new home sales and the weekly DOE energy report. The DOE report, as usual, will be closely scrutinized heading into the peak U.S. driving season.

U.S. Stock Indexes: The indexes were narrowly mixed in overnight electronic trading. Gains will be limited in the indexes if the commodities suffer general losses today, and that could be the case with gold and crude oil down sharply in overnight trading. Serious near-term technical damage has been inflicted on the stock indexes recently. But I still don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish and prices are well below the key 100-day moving average. Key technical support today is Tuesday's fresh six-month low of 1,247.20. Sell stops likely reside under key technical support level. Key upside resistance for active traders today is still the 1,265.00 level. I look for some short-covering support to limit losses in the market today.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish and prices are also well below the key 100-day moving average. However, the 14-day RSI is still well into oversold territory (below 30.00), which is one clue that prices could see a corrective bounce today. Key technical support for today is 1,550.00. Sell stops likely reside below that level. On the upside, key short-term resistance is seen at the 1,600.00 level. I look for some short-covering support to limit losses in the market today.

June Dow: This index closed at a fresh two-month low close Tuesday and has been leading the declines in the U.S. stock indexes. I look for the Dow to continue to be the leader on any significant price moves in the index. The Dow is due for an upside corrective bounce and I look for short covering to limit losses today. Key today will be for the bulls to hold technical support at this week's low of 11,064. Sell stops likely reside just below that level. Bulls would get a technical boost today with a move above short-term resistance at 11,150.

U.S. Treasury Bonds and Notes: Both notes and bond prices were solidly higher in overnight trading and early this morning. "Flight-to-quality" buying was featured due to the sharp losses in crude oil and gold, and the jittery stock markets. Bears are still in overall technical control of both markets, however.

June U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) have now turned fully bullish. The 4-day moving average is above the 9- and 18-day averages, and the 9-day is now above the 18-day. The next short-term downside price objective for the bears is pushing prices below support 106 24/32. Sell stops likely lie below that level. It will take a push above resistance at Monday's high of 107 26/32 to provide the bulls with fresh upside short-term technical momentum. Buy stops likely reside above that level. First resistance is seen at 107 26/32 and then at 108 even. First support is seen at 107 even and then at 106 24/32 and then at 106 21/32.

June U.S. T-Notes: Bulls look to be strong today. Buy stops do likely reside just above resistance at Monday's high of 106.00.5. The 4-day moving average has pushed above the 9-day average, and the 9-day has also moved above the 18-day moving average. A move in prices below support at 105.13.5--Tuesday's low--likely would uncover some sell stops.

Currencies: The June U.S. dollar index is firmer in early morning dealings and the currencies are mostly lower. The recent near-term trends in the major currencies are still in place--down for the DX and up for the other currencies. But price action has become choppier. The June U.S. dollar index finds key short-term technical support at 84.15 and resistance at 85.00. Key support in the June Euro today is the 1.2800 level. Resistance for the Euro is seen at this week's high of 1.2910. Buy stops likely reside above that level.

Metals: The metals are sharply lower in early morning dealings, with copper futures leading the way. My bias is still that the metals have put in near-term lows with recent price action, and now trade will be choppier. However, a major losses today could produce some near-term chart damage to change my near-term assessment. Today's price action will be extra important for the near-term market direction. The bull markets are not finished in metals, by any means. Key resistance for June gold today is the $675.00 level. Buy stops likely reside above that level, while sell stops likely reside below support at $650.00 in June gold.

Energies: Prices are sharply lower in early electronic dealings, pressured by the lower metals. Traders are awaiting today's key DOE stocks data. July crude oil hit a fresh six-week low of $68.17 on Monday, but rebounded strongly from that level. Look for buy stops to reside just above resistance at Tuesday's high of $72.15. Look for sell stops just below support at $70.00. I don't look for solid downside price pressure from here. I look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

Grains: Prices were mixed in overnight electronic trading--corn and wheat lower, and soybeans firmer. The big declines in crude and gold could hit the grains today--especially wheat, which has seen a good run higher recently. More bird flu in the news today could pressure the soybean complex. I'm still looking to buy significant weakness in soybeans and eventually in corn, but will be patient. Grains will continue to closely track the "outside markets" like crude and gold.

Posted by Jim Wycoff at 08:20 AM | Permalink | Comments (0) | TrackBacks (0)

Overnight Developments: The U.S. stock indexes were higher in overnight electronic trading. The U.S. dollar is firmer versus the major currencies in early trading, gold is modestly higher, crude oil is solidly higher and U.S. Treasury Bonds are lower in early dealings. Grains were higher in overnight electronic trading. There were no major geopolitical news events that occurred overnight.

U.S. Economic Reports: On tap today are ICSC store sales index, Redbook sales index, the Richmond Federal Reserve survey--none of which are expected to be major market movers today.

U.S. Stock Indexes: The indexes were higher in overnight electronic trading, on a corrective bounce from recent solid losses. Serious near-term technical damage has been inflicted on the stock indexes recently. But I don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish and prices are well below the key 100-day moving average. Key technical support today is Monday's fresh six-month low of 1,255.30. Sell stops likely reside under key technical support level. Key upside resistance for active traders today is still the 1,280.00 level. I look for more short-covering support to lift the market today.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are still fully bearish and prices are also well below the key 100-day moving average. However, the 14-day RSI is still oversold territory (below 30.00), but is now moving back higher, which is one clue that prices could see a corrective bounce today. Key technical support for today is Monday's low of 1,576.00. Sell stops likely reside below that level. On the upside, key short-term resistance is seen at the 1,612.00 level. I look for more short-covering support to lift the market today.

June Dow: This index hit a fresh two-month low Monday and has been leading the declines in the U.S. stock indexes. I look for the Dow to continue to be the leader on any significant price moves in the index. The Dow is due for an upside corrective bounce and I look for short covering to support today. Key today will be for the bulls to hold technical support at Monday's low of 11,064. Sell stops likely reside below that level. Bulls would get a technical boost today with a move above short-term resistance at 11,200.

U.S. Treasury Bonds and Notes: Both notes and bond prices were weaker in overnight trading and early this morning. Prices Monday hit a fresh four-week high, but the bulls are becoming exhausted after the recent short-covering bounce. Bears are still in overall technical control of both markets, however.

June U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are still turning bullish. The 4-day moving average is above the 9- and 18-day averages, and the 9-day is now moving above the 18-day. The next short-term downside price objective for the bears is closing prices below support 106 15/32. Sell stops likely lie below that level. It will take a close above resistance at Monday's high of 107 26/32 to provide the bulls with fresh upside short-term technical momentum. Buy stops likely reside above that level. First resistance is seen at 107 12/32 and then at 106 26/32. First support is seen at 106 24/32 and then at 106 21/32.

June U.S. T-Notes: Bulls have posted a decent upmove, but are now tired. Buy stops do likely reside just above resistance at Monday's high of 106.00.5. The 4-day moving average has pushed above the 9-day average, and the 9-day is trying to move above the 18-day moving average, but is faltering. A move in prices below support at 105.08.0 likely would uncover some sell stops and would likely mean the upside correction is finished.

Currencies: The June U.S. dollar index is firmer in early morning dealings and the currencies are mostly lower. The recent near-term trends in the major currencies are still in place--down for the DX and up for the other currencies. Monday's price action helped confirm the recent trends are likely to continue. But price action has become choppier. The June U.S. dollar index finds key short-term technical support at 84.00 and resistance at 85.00. Key support in the June Euro today is the 1.2800 level. Resistance for the Euro is seen at Monday's high of 1.2910. Buy stops likely reside above that level.

Metals: The metals are higher in early morning dealings, with copper futures solidly higher. My bias is that the metals have put in near-term lows with recent price action, and now trade will be choppier, but with an upside bias. Today I look for bargain hunters to step in and give the metals a significant boost. The bull markets are not finished in metals, by any means. Key resistance for June gold today is the $680.00 level. Buy stops likely reside above that level, while sell stops likely reside below support at $650.00 in June gold.

Energies: Prices are solidly higher in early electronic dealings. July crude oil hit a fresh six-week low of $68.17 on Monday, but has rebounded strongly from that level. Look for buy stops to reside just above resistance at $71.00. Look for sell stops just below support at $70.00. I don't look for solid downside price pressure from here. I look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

Grains: Prices were solidly higher in overnight electronic trading. Weekly crop progress reports showed worse-than-expected wheat crop ratings, and that will give a boost to wheat today--and the other grains are likely to follow. I'm still looking to buy significant weakness in soybeans and eventually in corn, but will be patient. Grains will continue to closely track the "outside markets" like crude and gold, which are higher early today. Those markets may even have more near-term influence on trading than the actual fundamentals in the grains.

Posted by Jim Wycoff at 08:41 AM | Permalink | Comments (0) | TrackBacks (0)

Overnight Developments: The U.S. stock indexes were lower in overnight electronic trading. The U.S. dollar is stronger versus the major currencies in early trading, gold is solidly lower, crude oil is lower and U.S. Treasury Bonds are higher in early dealings. Grains were lower in overnight electronic trading. Trader focus continues on the metals markets. There were no major geopolitical developments over the weekend.
U.S. Economic Reports: There are no major U.S. economic reports due for release today. Dallas Fed President Fisher speaks at midday today.

U.S. Stock Indexes: The indexes were weaker in overnight electronic trading, following solid losses last week. Significant near-term technical damage has been inflicted on the indexes recently. I don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) are fully bearish and prices are well below the key 100-day moving average. Key technical support today is last week's low of 1,258.50. Sell stops likely reside under that price level. Key upside resistance for active traders today is the 1,280.00 level.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are fully bearish and prices have also dropped well below the key 100-day moving average. However, the 14-day RSI is still oversold territory (below 30.00), which is one clue that prices could see a corrective bounce today. Key technical support for today is last week's low of 1,581.50. Sell stops likely reside below that level.

June Dow: This index has been leading the declines in the U.S. stock indexes. Look for the Dow to continue to be the leader on any significant price moves in the index. If the indexes are to post a recovery soon, the Dow will have to be the leader. Key today will be for the bulls to hold technical support at last week's low of 11,100. Sell stop likely reside below that level. Bulls would get a technical boost today with a move above resistance at 11,300.

U.S. Treasury Bonds and Notes: Both notes and bond prices Friday closed near mid-range but did hit a fresh four-week high and closed at the weekly high close. Bulls do have some fresh technical momentum heading into the new trading week. Short covering was featured last week. Bears are still in overall technical control of both markets, however.

June U.S. T-Bonds: Shorter-term moving averages (4- 9- 18-day) are turning bullish. The 4-day moving average has moved above the 9- and 18-day averages, and the 9-day is now moving above the 18-day. The next near-term downside price objective for the bears is closing prices below support 106 even. It will take a close above resistance at 108 even today to provide the bulls with better upside near-term technical momentum. First resistance is seen at 107 17/32--Friday's high--and then at 108 even. First support is seen at 107 even and then at 106 21/32--Friday's low.

June U.S. T-Notes: Bulls posted a decent upmove last week. Buy stops do likely reside just above resistance at 106.00.0. The 4-day moving average has pushed above the 9-day average, and the 9-day is moving above the 18-day moving average, which is a positive near-term technical development. A move in prices below support at 105.00.0 likely would uncover some sell stops and would likely mean the upside correction is finished.

Currencies: The June U.S. dollar index is higher in early morning dealings and the currencies are mostly lower. While the near-term trends in the major currencies are still in place, the are losing strength as price activity has become more volatile and choppy at lower levels in the dollar index and at higher levels in the currencies. The U.S. dollar index closed at the weekly high close last week. Key support in the June Euro today is the 1.2700 level. Sell stops likely reside below that level.

Metals: The metals are solidly lower in early morning dealings. Gold is leading the way, but prices are coming off from morning lows. I would not be surprised to see the metals trade on both sides of unchanged today in volatile trading. I also look for bargain hunters to step in and give the metals a significant boost soon. The bull markets are not finished in metals, by any means. Key resistance for June gold today is the $380.00 level. Buy stops likely reside above that level, while sell stops likely reside below today's low of $636.80 in June gold.

Energies: Prices are solidly lower in early electronic dealings. July crude oil hit a fresh six-week low of $68.17 in overnight trading. I don't look for solid downside price pressure from here. I look for more trading within a range--bound by key near-term support at $68.00 in July crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

Grains: Prices were solidly lower in overnight electronic trading. The grains still feel heavy to start the week, especially in corn and wheat. My bias is still that the markets are due for some more downside action in corn and wheat, in the near term. Soybeans look less susceptible to near-term selling pressure, but will be a follower. I'm still looking to buy significant weakness in soybeans and eventually in corn. Grains will continue to closely track the "outside markets" like crude and gold. Those markets may even have more near-term influence on trading than the actual fundamentals in the grains.

Posted by Jim Wycoff at 08:46 AM | Permalink | Comments (0) | TrackBacks (0)

Overnight Developments: The U.S. stock indexes made another modest recovery in overnight electronic trading, following more solid losses during the day session Thursday. The U.S. dollar is stronger versus the major currencies in early trading, gold is modestly lower and U.S. Treasury Bonds are slightly higher in early dealings.

U.S. Economic Reports: There are no major U.S. economic reports due for release today. Chicago Fed President Moskow speaks this morning at a banking conference. U.S. Treasury Secretary Snow speaks at a Bond Market Association meeting at midday.

U.S. Stock Indexes: The indexes again showed a moderate rebound in overnight electronic trading, following solid losses during the day session Thursday. Significant near-term technical damage has been inflicted on the indexes this week. The indexes are now short-term oversold, technically, and due for a corrective bounce soon. I don't look for strong price trends to develop in the indexes. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) have turned bearish the past few sessions and prices this week have also dropped below the key 100-day moving average. This index is overdone on the downside, but a weekly low close today would further embolden the bears. Key technical support today is this week's low of 1,261.70. Sell stops likely reside under that price level.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) are also bearish and prices have also dropped below the key 100-day moving average. However, the 14-day RSI is into oversold territory (below 30.00), which is one clue that prices could see a corrective bounce today. Key technical support for today is this week's low of 1,592.00. Sell stops likely reside below that level.

June Dow: This index has been leading the declines in the U.S. stock indexes. I look for the Dow to continue to be the leader on any significant price moves in the index. If the indexes are to post a recovery soon, the Dow will have to be the leader. Key today will be for the bulls to hold technical support at this week's low of 11,135. Sell stop likely reside below that level. And a close below solid chart support at the April low of 11,080 would produce more chart damage and open the door to some more downside pressure to develop.

U.S. Treasury Bonds and Notes: Prices are narrowly mixed in early dealings today. Price action Thursday saw a decent price recovery. But again, it's just short covering in bear markets. Near-term price trends are still solidly down. I still don't see any near-term clues to suggest bonds and notes will see a significant trend reversal any time soon. Look for a sideways to lower "grind" in prices to continue. Path of least resistance in bonds and notes continues southward.

June U.S. T-Bonds: A weekly high close on Friday would give the bulls some fresh upside technical momentum. There is some stiff daily resistance at Thursday's high of 107 2/32. Some buys stops likely reside above that level. For bears today, a price move below support at 106 even would suggest the upside correction has run its course and the downtrend will resume. Shorter-term moving averages (4- 9- 18-day) are beginning to turn bullish, however. The 4-day moving average has just moved above the 9- and 18-day averages.

June U.S. T-Notes: Bulls posted a good upmove Thursday, but now Thursday's high of 105.21.0 is some stiff overhead resistance. Buy stops do likely reside just above that level. The 4-day moving average has just pushed above the 9-day average, which is a slightly positive near-term technical development. A move in prices below support at 105.00.0 likely means the upside correction is finished.

Currencies: The June U.S. dollar index is solidly higher in early morning dealings. While the strong near-term trends in the major currencies are still in place, price activity has become more volatile and choppy at lower levels in the dollar index and at higher levels in the currencies. This is one early clue that the price trends may be about to end. A weekly high close in the DX and weekly low closes in the currencies would be significant technical developments that add to notions of trend changes.

Metals: The metals are lower in early morning dealings, with copper leading the way with sharp losses. My bias is that copper is likely to lead the gold and silver markets on any significant price moves in the near term. Sharp early losses in copper today don't bode well for gold and silver. And silver bulls are already on the ropes after big losses Thursday. Weekly low closes in the metals would be significantly near-term bearish. I am by no means a longer-term market bear on the metals, however.

Energies: Prices are modestly higher in electronic dealings this morning. Prices Thursday did rebound from the bottom of their recent trading ranges, which is not surprising. Look for more trading with in a range--bound by key near-term support at $68.00 in June crude and solid resistance at $75.00. A drop below the aforementioned trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00. It's very likely going to take another geopolitical market "shock" to move crude above $75.00.

Grains: Prices were lower in overnight electronic trading, which does not surprise me. The grains feel a bit heavy to end the week, especially in corn and wheat. Weather in the Plains is still the major feature, with hot conditions forecast for the Plains states in the coming days. If the grains can push above their highs for this week, then that
could set the stage for much bigger price gains heading into the key summertime months. But my bias is that the markets are tired and due for at least some corrective downside action in corn and wheat. Soybeans also look susceptible to near-term selling pressure.

Posted by Jim Wycoff at 08:41 AM | Permalink | Comments (0) | TrackBacks (0)

Overnight Developments: The U.S. stock indexes made a recovery in overnight electronic trading, following steep losses during the day session Wednesday. The U.S. dollar was slightly weaker versus the major currencies overnight, gold was moderately lower and U.S. Treasury Bonds were slightly higher in overnight trading.

U.S. Economic Reports: On tap today are jobless claims; the April Leading Economic Indicators (LEI) report; the Philadelphia Federal Reserve business index; weekly natural gas storage report. Fed Chairman Bernanke speaks at a Chicago Fed bank conference. None of these reports/events are considered major market movers, however.

U.S. Stock Indexes: The indexes showed a moderate rebound in overnight electronic trading, following sharp losses during the day session Wednesday. Some near-term technical damage was inflicted on the indexes Wednesday. Bulls are rattled and I would not be surprised to see more selling pressure in the near term. However, I don't look for strong price trends to develop. More likely is choppier and more sideways trading action heading into the summer months.

June S&P 500: The shorter-term moving averages (4- 9- and 18-day) have turned bearish the past few sessions and prices have also dropped below the key 100-day moving average just recently. However, the 14-day RSI did dip into oversold territory (below 30.00) on Wednesday, which is one clue that prices could see a corrective bounce today.

June Nasdaq: The shorter-term moving averages (4- 9- and 18-day) have turned bearish the past few sessions and prices have also dropped below the key 100-day moving average just recently. However, the 14-day RSI did dip into oversold territory (below 30.00) on Wednesday, which is one clue that prices could see a corrective bounce today.

June Dow: This index was hammered lower Wednesday, leading the declines in the stock indexes. I look for the Dow to continue to be the leader on any significant price moves in the index. If the indexes are to post a recovery soon, the Dow will have to be the leader. A close below solid chart support at the April low of 11,080 would produce more chart damage and open the door to some more downside pressure to develop.

U.S. Treasury Bonds and Notes: Jobless claims came in as expected, but were large enough to give the Treasuries an early-morning boost. However, it's just short covering in bear markets. Bonds and notes continue to hover near their contract lows, with the near-term price trend still being solidly down. I don't see any near-term clues to suggest bonds and notes will see a significant trend reversal any time soon. Look for a sideways to lower "grind" in prices to continue. Path of least resistance in bonds and notes continues southward.

June U.S. T-Bonds: For active traders, resistance at this week's high of 106 17/32 is key upside objective for bulls. For bears, a close below solid support at the contract low of 105 11/32 is next downside objective. Shorter-term moving averages (4- 9- 18-day) are bearish. The 14-day Relative Strength Index is in neutral territory.

June U.S. T-Notes: Bulls could do nothing with this week's key reversal up on the daily bar chart, which only reaffirms the bears' strong near-term posture. However, the 4-day moving average is poised to push above the 9-day average today, which would be a slightly positive near-term technical development. Resistance at this week's high of 105.10.0 is key upside objective for active Note traders. Solid support at the contract low of 104.18.5 is key level for bears.

Currencies: The June U.S. dollar index is weaker in early morning dealings. Remember that trends in the currencies tend to be stronger and longer lasting than trends in other markets. Wednesday's rebound in the dollar index and weakness in the major currencies was just corrective in nature. The strong near-term trends are still in place. Don’t stand in front of a freight train and try to pick a bottom in the DX or a top in the currencies. I'll keep you informed on any early technical clues that do suggest trend changes may be on the horizon.

Metals: The metals are mixed in early morning dealings. Gold and silver are lower and copper is modestly higher. The bulls are not out of the woods yet, regarding the potential for another big downside corrective pullback. And this is key: Copper is likely to lead the gold and silver markets on any significant price moves in the near term. Reason: Copper had gone stratospheric recently, pushing to above $4.00 a pound. It's the red industrial metal that should begin to feel any serious downside pressure first, if the speculative trading community does decide to let some air out of the bubble.

Energies: Prices are under slight selling pressure in early dealings. Bears do have some fresh downside near-term technical momentum following this week's losses. Solid losses today are likely to produce some near-term chart damage, as markets are close to key near-term support levels ($68.00 in June crude). I look for prices to chop within the recent trading range of $68 and $75.00. A drop below this trading range--including multiple closes below it--would then likely mean a trading range in crude oil prices between $65.00 and $70.00.

Grains: Weekly USDA export sales this morning came in positive for corn and neutral for wheat and soybeans. Weather in the Plains is the major feature, with hot conditions forecast for the Plains states in the coming days. Markets are a bit overextended, technically, and if follow-through strength can be attained today, the grain markets could be setting the stage for much bigger price gains heading into the key summertime months. Grain traders will continue to closely watch the "outside markets" which are mainly metals and crude oil. In fact, look for grain markets to more closely follow crude oil and gold more closely than their own fundamentals, for at least the near term.

Posted by Jim Wycoff at 09:01 AM | Permalink | Comments (0) | TrackBacks (0)

The raw commodities sector has been in the business media spotlight for months, as several major bull runs are playing out in individual commodities futures markets. That spotlight got a little brighter this week when gold futures pushed above $700.00 an ounce and hit a 25-year high.

How long will these bull markets in raw commodities last? Will major bull markets in other commodities develop soon? Is there a "speculative bubble" in some commodities markets, such as precious metals and liquid energies? If so, when will the bubble burst?

These are compelling questions and opinions vary widely on what may be the right answers. I've heard at least one respected markets analyst forecast the general bull market in raw commodities will see a climax by the end of this year, due to speculative excesses already being built up in many markets, such as the metals. And I've seen forecasts by other respected market analysts that the bull market in commodities will persist for several years to come, due to the simple laws of supply and demand: Increasing demand for the finite supplies of raw commodities, due to growing worldwide industrialization. My bias is that the general bull market in raw commodities will continue to play out in the coming months, and probably longer, with different commodity sectors leading the charge at different times.

In a compelling discussion with the Pro Farmer editorial team this week, we discussed the above questions. (This team has well over 100 years of collective market experience.) We came to no consensus answer regarding when the general bull market run in raw commodities markets will likely end. However, we did discuss what event could occur (and may even be likely to occur) to prompt a possible sudden end: A "change in the rules" of trading markets or in market structure.

We do not know specifically what rule change will occur, or when, that would prompt the end of the bull market in commodities. However, we did discuss the realm of possibilities that could lead to a major change in trader psychology that would turn commodities traders from generally bullish to generally bearish. Here are a few:

-- Significant increases in margin requirements for speculative trading of futures contracts. When markets do get wild at higher price levels, exchanges do raise margin requirements to help to ensure the integrity of futures markets.

-- Loss of public confidence in the "price discovery" process that determines the price of raw commodities--namely the futures markets. With energy prices at record highs, there is presently consternation with the oil companies and their record-high profits. What if that consternation spills over into loss of public confidence in the energy futures markets? Already, there has been some grumbling that the high volatility in the energy futures prices is not good for the consumer.

Importantly, it's very highly unlikely that futures markets would ever be outlawed. (And it's my strong bias that traders and futures exchanges do a highly efficient, important and representative job of price discovery in all futures markets.) However, it's not unrealistic to think that, in the face of wild price fluctuations in many futures markets, legislators could "cave in" to some pressure groups and pass laws that would significantly alter the structure of futures markets, including curtailing how much speculators can participate in them.

--- A change in the rules that govern U.S. monetary policy. The declining value of the U.S. dollar versus the other major currencies has helped to accelerate the bull market runs in gold and silver, and copper. The weaker value of the greenback also enhances the perception that "hard assets" like physical commodities are of greater value than "paper assets" like bonds and stocks.

If the U.S. government took steps to increase the value of the U.S. dollar versus the other major currencies, such as foreign exchange intervention or even government official "jawboning," then that could tip the scales in favor of the commodity market bears. In 1985 then U.S. Secretary of the Treasury James Baker make official remarks at a Group of Five meeting that roiled the currency markets and sent the dollar plunging in value.

Posted by Jim Wycoff at 12:18 PM | Permalink | Comments (0) | TrackBacks (0)