Free Swing Trading and Day Trading Picks & Education

• It�s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation�s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. 
• One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous 12 percent in the last quarter-century alone. 
• All the growth in recent decades and more has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran.  
• Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called marginal-productivity theory. In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. 
• The corporate executives who helped bring on the recession of the past three years whose contribution to our society, and to their own companies, has been massively negative went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards performance bonuses that they felt compelled to change the name to retention bonuses (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin. 
• Economists are not sure how to fully explain the growing inequality in America. The ordinary dynamics of supply and demand have certainly played a role: laborsaving technologies have reduced the demand for many good middle-class, blue-collar jobs. Globalization has created a worldwide marketplace, pitting expensive unskilled workers in America against cheap unskilled workers overseas. Social changes have also played a role for instance, the decline of unions, which once represented a third of American workers and now represent about 12 percent.
• ....many of the distortions that lead to inequality such as those associated with monopoly power and preferential tax treatment for special interests undermine the efficiency of the economy. This new inequality goes on to create new distortions, undermining efficiency even further. To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy. 
• The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. 
• In recent weeks we have watched people taking to the streets by the millions to protest political, economic, and social conditions in the oppressive societies they inhabit. Governments have been toppled in Egypt and Tunisia. Protests have erupted in Libya, Yemen, and Bahrain. The ruling families elsewhere in the region look on nervously from their air-conditioned penthouses will they be next? These are societies where a minuscule fraction of the population less than 1 percent controls the lion�s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general. 
• As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.

Economist Mehmet Pasaogullari at the Cleveland Fed reviews inflation from several angles. If nothing else, he offers a timely reminder that there's more than one way to skin this statistical cat. Inflation comes in a variety of flavors. But while the numbers vary, there's a common trend afoot, he reports, noting that "all measures of short-term inflation expectations we have looked at show an upward trend since last summer."

Pasaogullari continues:

Some measures showed higher increases, and others were much more limited. Measures of longer-term inflation expectations have also risen in the last six months... However, most of the increase in the market-based measures happened in September and October 2010. The recent increases in food and energy prices have had limited, if any, effect on the long-term expectations. They seem to be well-anchored and are in line with their averages of the previous decade.

The question (as always) is whether the past is prologue? Looking for answers in real time is forever problematic. That said, the inflation forecast based on the yield spread between the nominal and inflation-indexed 10-year Treasuries has inched higher since Pasaogullari's essay was published on April 1. In fact, the Treasury market's inflation outlook is 2.57%, as of yesterday. That matches the previous peak, set back in early July 2008, when oil was near an all-time high.

The last time we hit 2.57%, inflation expectations started falling...and crashed soon after. That's not likely to happen this time, of course. Why? The catalyst isn't likely to make a repeat performance. Massive financial crises of the type that hit the world in late-2008, fortunately, are rare. So what does that mean for the inflation trend this time? Stay tuned...

Ramesh Ponnuru of The National Review does a first-rate job of summarizing the counterintuitive nature of monetary policy and how it applies to recent history. In particular, he explains in clear and (mostly) non-technical terms how and why the Fed's "passive tightening" in late-2008 helped turn what might have been a relatively modest recession into something much worse. He also outlines why the subsequent QE2 was necessary and how many commentators (primarily conservatives) have misunderstood the necessary monetary policy solution, along with the fact that low interest rates of late aren't a sign of loose money.

These and related subjects have been discussed in great detail in recent years by such economists as Scott Sumner, David Beckworth and others. But the finer points of how a surge in the demand for money can change the rules of monetary policy still aren't widely understood. As Ponnuru explains,

Easier money can lead to a destabilizing run on the currency. Inflation can be associated with low real interest rates and an expanded monetary base. But not always: Not in the 1930s, and almost certainly not today, either. The late Milton Friedman, perhaps the most famous inflation hawk of his generation, spotted the fallacy in his analysis of 1990s Japan: Low interest rates can also be a symptom of an excessively tight monetary policy that has choked off opportunities for growth. A looser policy, by increasing expectations of future economic growth, could actually raise real interest rates.

Ponnuru isn't breaking new ground here, but he is outlining crucial details of how monetary policy ticks these daysdetails that (still) need to be discussed. Maybe because The National Review is pushing this story, it'll finally resonate with those on the right. In any case, this is a valuable overview that's worthy of everyone's attention.

The most recent downleg in the ProShares UltraShort Oil & Gas ETF (DUG) from 31.93 to 25.73 looks like a completed bearish structure.  The fact that prices reversed sharply to the upside today after first hitting a new low suggests strongly that the DUG hit downside exhaustion at under 25.80 earlier today.

insert.a.chart.DUG

For the time being, DUG is in the midst of a run-of-the-mill recovery rally. That said, the energy sector is so overbought and vulnerable to a period of retrenchment that this run-of-the-mill recovery rally (in the inverse DUG) could easily and quickly morph into a powerful countertrend rout, as holders of long energy positions take some of their very substantial profits.

In terms of the DUG, my initial upside target zone is 27.60-28.00.

There has been a lot of talk about the possibility of a U.S. government shutdown. Republicans and Democrats in Washington continue to clash on budget negotiations, raising the risk of the first government shutdown since 1995 during the Clinton Administration. Congressional leaders are in deep discussions and a shutdown could be avoided, but with the U.S. government telling federal agencies to be prepared to implement contingency plans, it is important for currency traders to be prepared as well by knowing how the U.S. dollar could react to the shutdown.

We have been down this road before 15 years ago and based upon the price action of the EUR/USD and USD/JPY at the time, investors are not too worried about the implications of a government shutdown on the economy. When the government was shut down in Nov 1995, both the EUR/USD and USD/JPY barely budged. When a second shutdown occurred during the Clinton Administration in December of that year, the dollar actually rallied against the Japanese Yen before normal government operations were resumed. The main reason is because any shutdown is expected to be so temporary that it will pose no risk to the U.S. sovereign debt rating. It will also not scare investors away from buying U.S. debt. The only major economic implication is that Federal workers won’t be paid during the period that the government is shut down. If an agreement isn’t reached by midnight on Friday, the government will shut down all non-essential government services.

• When millions of workers didn't return to their southern China factory jobs after Lunar New Year holidays, a turning point was reached for foreign manufacturers scraping by with slim profit margins.  Companies were already under pressure from rising raw material costs, restive workers and lower payments for exports because of a stronger Chinese currency. Despite hiking wages, labor shortages kept getting worse as workers increasingly spurned the often repetitive and unskilled jobs that helped earn China its reputation as the world's low-cost factory floor.
• "I don't know of any factory in China that can absorb both the raw material prices we have, the labor issues we've been looking at and the renminbi," China's strengthening currency, said Hubbs. The currency is also known as the yuan.  He's joining a wave of export manufacturers, big and small, that are moving from China's coastal manufacturing regions to cheaper inland provinces or out of the country altogether, in a clear sign that southern China's days as a low-cost manufacturing powerhouse are numbered.
• Foxconn Technology Group -- the world's biggest contract electronics manufacturer with customers including Apple Inc., Sony Corp. and Hewlett-Packard Co. -- is planning to gradually cut its workforce of 400,000 in the southern Chinese city of Shenzhen by a quarter and move the bulk of manufacturing inland. 
• China watchers at Credit Suisse, an investment bank, call the shift an "historical turning point" for China's economy and perhaps the world as the country's role in keeping global inflation low by supplying cheap goods is set to end.
• "It may take a decade for China to see its export competitiveness erode, but we have seen the beginning of this happening," the Credit Suisse report said, predicting that salaries for China's estimated 150 million migrant workers would rise 20 to 30 percent a year for the next three to five years.
• That's partly because China's traditional advantage -- its vast, cheap pool of workers -- is drying up. Economists say it's the result of a rapidly aging population after 40 years of the one-child policy.
• The ripple effects of rising costs in China are already being felt around the globe. U.S. clothing retailers are raising prices for shirts and other garments by 10% on average after a decade of price falls, partly due to higher labor costs in China.
• China's blistering growth has also lifted incomes and created more opportunities in poorer inland provinces, which means fewer people leaving for jobs in the richer coastal cities.  Some 30 to 40% of migrant workers didn't return to their factory jobs in Guangdong province's Pearl River Delta manufacturing heartland after the annual Lunar New Year holiday in February, said Stanley Lau, deputy chairman of the Hong Kong Federation of Industries. Typically the proportion is 10 to 15%.  That was despite Guangdong authorities raising minimum wages by up to 20% in March.
• Many factories already pay more to retain workers but are still having a hard time finding manpower.  Hubbs employs about 500 workers earning 1,800 to 2,000 yuan ($275 to $306) a month, a lot higher than Guangzhou's 1,300 yuan minimum wage, which came into effect March 1. But he's still short about 100 people, resulting in a 90-day turnaround time for orders, twice as long as he'd like. 
• He wants to move 30 to 40% of production to a new factory in Cambodia, Laos or even Myanmar in six to eight months.  Hubbs has looked at moving elsewhere in China but doesn't think the cost savings would last beyond two or three years as wages and prices even out across the country.
• Greater use of automation is also becoming more economic.  CBL Group, a contract manufacturer, has five welding robots used to assemble brackets for hospital beds and seat frames for new carriages on the New York subway. Chairman Gideon Milstein said he bought them in 2007 and 2008 for $600,000 because they could track welds by computer to ensure they were up to standard.  At the time, it was cheaper to weld by hand but that's changing because wages for skilled human welders are going up.  "It will soon be cheaper to weld by robot than it is by human in China," Milstein said.

MarketWatch's Robert Powell reports that two legendary investors have conflicting points of views on stocks and bonds. Rob Arnott is cautious on the outlook for equities and Bill Gross is anxious about expected returns for bonds. Putting the two together suggests it's time to avoid stocks and bonds.

In fact, there's always a divergence of opinion on where asset classes are headed. Morningstar analyst Miriam Sjoblom wonders if the extra income from high yield bonds is still worth the risk. There's also worries about REITs and commodities, which have posted exceptionally strong gains over the past year. Nonetheless, there's no shortage of analysts who think these asset classes are still worth owning. No less is true for stocks and bonds.

In a world of endless opinions and predictions, it's easy to lose perspective when it comes to strategic-minded investing. You're surely asking for trouble if you let the data dump that is the Internet overwhelm the big picture. There are lots of smart analysts offering valuable insights, of course, but everyone needs a baseline to begin the critical business of estimating expected returns. But even here, the possibilities are endless and so it's easy to get lost in a sea of numbers.

How should we begin? One possibility is estimating equilibrium risk premiums for the long haul. It's no silver bullet, but it offers a good starting point. The basic idea is that making some assumptions about risk and correlation for the major asset classes offers some useful, if not less than flawless forecasts. One of the attractions of this approach is that it refrains from trying to predict returns directly, which is especially hazardous. Instead, the guesswork is focused on the risk side of the equation, which is somewhat more reliable when it comes to divining the future. In turn, reasonable risk estimates imply what the returns should be in the long haul. That may not sound like much, but if can be a valuable foundation for deeper analysis.

The basic idea was outlined in a 1974 paper by Professor Bill Sharpe. Over the years, a number of analysts have reviewed the concept with an eye on practical applications. For example, Gary Brinson outlines a concise explanation of the process in Chapter 3 of The Portable MBA in Investment .

The concept is one of estimating what's known as equilibrium risk premiums. That is, the excess returns for an asset class performance less the "risk free" rate of return as defined by, say, 3-month Treasury bills. The equilibrium reference is the assumption that markets clear eventually and so supply equals demand. That�s not all that practical as a short run assumption, but in the long run it's a fair reading of how markets work. If it were otherwise, beating broad indices would be a breeze, which is definitely not the case.

Here's what Robert Litterman says of equilibrium risk premium estimates in his book Modern Investment Management: An Equilibrium Approach ...

We need not assume that markets are always in equilibrium to find an equilibrium approach useful. Rather, we view the world as a complex, highly random system in which there is a constant barrage of new data and shocks to existing valuations that as often as not knock the system away from equilibrium. However, although we anticipate that these shocks constantly create deviations from equilibrium in financial markets, and we recognize that frictions prevent those deviations from disappearing immediately, we also assume that these deviations represent opportunities. Wise investors attempting to take advantage of these opportunities take actions that create the forces which continuously push the system back toward equilibrium. Thus, we view the financial markets as having a center of gravity that is defined by the equilibrium between supply and demand. Understanding the nature of that equilibrium helps us to understand financial markets as they constantly are shcoked around and then pushed back toward that equilibrium.

With that in mind, let's make some assumptions about the long run future and see how estimated equilibrium risk premiums stack up. First, we need a forecast of the market price of risk. As Brinson notes, this is "the premium the market demands as compensation per unit of risk." Based on our analysis of our proprietary Global Market Index (a benchmark that passively weights all the major asset classes), our view is that the market portfolio will have a Sharpe ratio of 0.2. Next, we need forecasts of volatility for each of the major asset classes. The third input is estimating each asset class's correlation with the market portfolio, as per GMI. With those estimates in hand, we can deduce expected risk premiums by multiplying the forecasts for the following variables:

Sharpe ratio for the market portfolio X Standard deviation of a given asset class X The asset class's correlation with the market portfolio

For example, we're assuming the market portfolio's Sharpe ratio will be 0.2 going forward. For U.S. stocks, we're assuming a 20% annualized standard deviation for returns and a correlation of 0.95 with GMI. The imputed risk premium from these inputs is an annualized 3.8% for domestic equities for the long run future. Remember, that's before the risk free rate. If you think T-bills will return, say, 2%, then the 3.8% U.S. equity risk premium becomes a 5.8% total return estimate (2% plus 3.8%).

Running this analysis on all the major asset classes gives us the following profile:

The risk premium estimate for GMI is simply adding up the individual estimates and weighting each based on relative market values.

With equilibrium return estimates in hand, we can now turn to the hard work of comparing them with other estimates. The goal is to figure out if our long-run forecasts differ materially with shorter term predictions. If so, we may have developed some valuable tactical information for adjusting the asset allocation for, say, the next 12 months. Any number of alternative methods for forecasting returns can be used, of course. But we can start with a simple review of realized risk premiums. Here's how the major asset classes compare over the past 10 years:

Keep in mind that the value here is the process as opposed to any one estimate. It goes without saying that some, perhaps all of our estimates will be wrong in some degree. That's par for the course with peering into the future, regardless of methodology. However, it's a safe assumption that the market portfolio will randomize the errors, which is why it's such a competitive benchmark.

The point is that by routinely estimating returns by first considering risk factors, we can develop some useful context. If, for instance, you think that the 3.8% annualized risk premium for U.S. stocks is too low, or too high, that's an invitation to go back and rethink the underlying assumptions and run additional analysis using alternative models of return forecasting. If your outlook for stocks still radically differs from the equilibrium estimate, maybe there's a compelling basis for overweighting or underweighting equities relative to the market portfolio, depending on your view.

In the long run, the average investor must hold the market portfolio, which means that the average investor is destined to earn the market's return. If you're not satisfied with the prospect of earning an average return, then you need some confidence for rethinking Mr. Market's asset allocation. Developing that confidence isn't easy or riskless, but estimating equilibrium risk premiums is a productive way to begin. Just don't confuse it with an end.

A lot of us intraday traders hyper-focus on the intraday charts and might come to one conclusion, but if we pull the perspective back to the higher timeframes, we might have an “A-ha” moment and see the broader picture that the intraday charts can’t reveal.

Namely, the Russell 2000 just touched all-time highs, the NASDAQ 100 recently broke above its 2007 “Bear Market” high, and the actual NASDAQ is mere points away from breaking through its 2007 peak.

The S&P 500 and Dow Jones, however, are lagging the other smaller-cap indexes and are points away from 3-year highs not seen since mid-2008 �" well below the 2007 peak.

Here �" charts show the whole picture better than words can.

Let’s start with the most bullish Russell 2000:

The Small-Cap index can lead the “Blue Chip” indexes, as was the case with the peak in July 2007 ahead of the final stock market peak in October 2007.

Today and yesterday, the Russell broke to new lifetime highs �" although by the smallest of margins on an overextended price rally.

The NASDAQ-100 Index has also broken to new recovery highs �" though the ’situation’ in 2000 (Tech Bubble Boom and Bust) will leave the NASDAQ far away from new lifetime highs for years to come.

We actually had a breakout to new recovery highs above 2007’s October peak in January 2011, and the current rally has not taken us up to new heights above 2,400.

Now we turn to our old friend the broader NASDAQ Index:

The October 2007 high was 2,861 and this week’s high was 2,815 which is just shy of the 2011 ‘new recovery high’ at 2,840.

One more good push takes us to index highs above 2007 not seen since late 2000.� Recall the ultimate NASDAQ peak in early 2000 was just above 5,100.� That won’t be happening again for years (it’s a little less than an index doubling from here).

And finally we turn to the two “Blue Chip” large cap indexes, starting with the Dow Jones:

This week, the Dow pushed to a marginal (weak) new recovery high above 14,000 not seen since May/June 2008.

Yes, volume is pathetic but we’re picking up on low volume across the board �" not the picture of bullish strength you would expect at new recovery highs but it’s part of the bullish landscape we have at the moment.

Finally, the S&P 500 is close, but not yet at new recovery highs beyond 1,344.

The S&P 500 and Dow Jones indexes are closest correlated in structure, just like the NASDAQ and Russell are correlated similarly.

S&P 500 volume has fallen off a cliff in 2011 but that �" so far �" has not stopped the rally into resistance which now threatens to break the resistance to new recovery highs.

So what’s the overall picture?

Yes, the lower frame charts �" daily and intraday �" show massive divergences particularly in volume which leads one to believe this rally will fail at the current resistance levels.

The higher frame charts �" if you ignore the signals from volume �" send a message of positive bullish strength that has persisted almost unchecked �" save the “Flash Crash” period of mid-2010 �" from the March 2009 low.

Yes, QE1 and QE2 are largely responsible for helping to push stock prices higher in both cases, but that’s a whole other debate for another day.

The intermediate term trends all remain up, and in the example of the NASDAQ and Russell, the trends have broken to new lifetime or new recovery highs beyond 2007.

Keep the larger perspective in mind and do not ignore the significance of markets that sneak or creep their way to new lifetime/recovery highs �" you’ll miss these realities if you spend your time focused only on the intraday charts and the bearish/caution signals that currently appear there.

Corey Rosenbloom, CMT
Afraid to Trade.com

Free stock pick for 04/05/2011

EUR/USD

The Euro was subjected to some selling pressure during the European session on Tuesday and retreated to test support near 1.4150, but the dollar was unable to gain significant traction and the Euro advanced again during the US session with a fresh challenge on resistance above 1.4250 in Asia on Wednesday.

The Euro was unsettled temporarily by another downgrade of Portugal's sovereign rating and by a further increase in Chinese interest rates, but the currency remained resilient in the face of persistent fears surrounding the peripheral outlook.

There were strong expectations of an ECB interest rate increase on Thursday and renewed speculation that the central bank would either decide on a 0.50% increase this month or would look to signal a series of increases over the next few months. The ECB will want to sound tough on inflation, but there is also likely to be a degree of caution given the global growth outlook.

The latest ISM non-manufacturing index was slightly weaker than expected at 57.3 for March from 59.7 the previous month and suggested that the sector might be slowing.

The FOMC minutes were broadly in line with expectations as a majority were content to maintain the highly-expansionary policy. There were greater reservations from several regional Fed Presidents and these divisions are liable to increase over the next few weeks. Without any clear comments from Chairman Bernanke, markets will assume that the Fed will be very reluctant to tighten policy.

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts
that�are up to�86% accurate�* 800-732-5407
If you would rather have the recent forecasts sent to you, please go here

Yen

The dollar found support close to 84.20 against the yen during Tuesday and made some advance following the FOMC minutes as US Treasury yields increased.

Dollar gains accelerated early in Asian trading on Wednesday as it pushed to a high near 85.50 which was the highest level for 2011. The yen was subjected to heavy selling pressure on the crosses as the Australian dollar and Sterling both made strong progress.

Overall risk appetite remains firmer which will maintain selling pressure on the currency in the short term. There will also be expectations that the Bank of Japan will look to maintain a highly-expansionary monetary policy at Thursday's council meeting which will also tend to sap yen support. There will be fears that markets are becoming complacent over global risk trends which could trigger a sharp correction.

Sterling

Sterling found support close to 1.6120 against the dollar on Tuesday and advanced strongly following the latest economic data. The PMI services index rose to 57.1 for March from 52.6 the previous month. This was a 13-month high for the index and much stronger than expected, although business optimism did actually decline slightly.

The stronger than expected data will increase pressure on the Bank of England to increase interest rates, especially as inflationary pressures were also reported as intensifying in the survey. The central bank will still be very uneasy over the economic outlook as consumer spending remains under pressure. There was also a slight moderation in the latest BRC shop-price inflation index which may ease retail inflation fears slightly.

The key factor is that Thursday's decision is likely to be very close, especially as there will certainly be a core of members who will vote for a rate increase.

The UK currency pushed to a high near 1.6350 against the dollar as it also gained support from a general improvement in risk appetite.

Swiss franc

The dollar found support on dips to below 0.9220 against the franc during Tuesday and spiked higher to a peak around 0.9290 before consolidating near the 0.9260 area later in Asian trading on Wednesday. The dollar gained from wider franc losses rather than independent strength as the Swiss currency retreated to lows beyond 1.32 against the Euro.

The improvement in risk appetite and a surge in carry-trade activity will continue to lessen potential defensive franc demand in the short term. Although there has been further evidence of capital flows from weaker European economies, there has been an increased flow into emerging markets rather than the franc. There will be no scope for complacency given the Euro-zone structural vulnerabilities.

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts
that�are up to�86% accurate�* 800-732-5407
If you would rather have the recent forecasts sent to you, please go here

Australian dollar

The Australian dollar dipped to lows just below 1.03 against the US currency on Wednesday, undermined by some degree of disappointment over the Reserve Bank's policy statement, while the announcement of another Chinese interest rate increase also damaged sentiment.

There was still strong buying support on dips and wider US vulnerability, together with renewed interest in commodity prices, helped push the local currency back to highs in the 0.9370 area. The domestic data was disappointing again with a second successive sharp decline in home loans for February which is liable to trigger fresh reservations over the currency.�

May sugar closed down 49 points at 27.51 cents yesterday. Prices closed near the session low yesterday. Trading has been choppy recently. Bulls and bears are on a level near-term technical playing field. However, prices are still in a two-month-old downtrend on the daily bar chart. Bulls' next upside price breakout objective is to push and close prices above technical resistance at 28.20 cents. Bears' next downside price breakout objective is to push and close prices below solid technical support at last week's low of 26.28 cents. First resistance is seen at 28.00 cents and then at 28.20 cents. First support is seen a yesterday's low of 27.43 cents and then at 27.00 cents.

Wyckoff's Market Rating: 5.0

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts
that�are up to�86% accurate�* 800-732-5407
If you would rather have the recent forecasts sent to you, please go here

May coffee closed up 1,165 points at 267.70 cents. Prices closed near the session high yesterday and scored a bullish "outside day" up on the daily bar chart, after hitting a fresh seven-week low early on. Coffee bulls have the overall near-term technical advantage and regained some upside momentum yesterday. A four-week-old downtrend on the daily bar chart was negated yesterday. Bulls' next upside breakout objective is to close prices above solid technical resistance at 281.15 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at yesterday's low of 254.05 cents a pound. First resistance is seen at 270.00 and then at 272.50 cents. First support is seen at 265.00 cents and then at 262.50 cents.

Wyckoff's Market Rating: 6.5

May cocoa closed down $52 at $2,968 a ton. Prices closed near mid-range yesterday. Serious near-term chart damage has been inflicted recently. Prices are in a steep four-week-old downtrend on the daily bar chart. The next upside price breakout objective for the cocoa bulls is to push and close prices above solid technical resistance at $3,200. The next downside price breakout objective for the bears is pushing and closing prices below solid technical support at the January low of $2,842. First resistance is seen at $3,000 and then at $3,050. First support is seen at $2,950 and then at last week's low of $2,925.

Wyckoff's Market Rating: 3.0.

May cotton closed up 551 points at 201.06 cents yesterday. Prices closed nearer the session high yesterday and scored a big and bullish "outside day" up on the daily bar chart.The bulls have the overall near-term technical advantage. Look for continued high volatility in the cotton market. The next downside price breakout objective for the cotton bears is to push prices below solid technical support at yesterday's low of 188.85 cents. The next upside price objective for the bulls is to produce a close above solid technical resistance at 211.16 cents. First support is seen at 200.00 cents and then at 197.50 cents. First resistance is seen at yesterday's high of 202.55 cents and then at 205.00 cents.

Wyckoff's Market Rating: 7.5.

May orange juice closed up 55 points at $1.6575 yesterday. Prices closed near mid-range. A five-week-old downtrend on the daily bar chart has been negated. The next upside price breakout objective for the FCOJ bulls is pushing and closing prices above strong technical resistance at $1.7000. The next downside technical breakout objective for the FCOJ bears is to produce a close below solid technical support at last week's low of $1.5915. First resistance is seen at yesterday's high of $1.6650 and then at $1.6750. First support is seen at yesterday's low of $1.6480 and $1.6265.

Wyckoff's Market Rating: 5.0.

May lumber futures closed down $3.20 at $292.10 yesterday. Prices closed near mid-range and hit another fresh 3.5-month low yesterday. Bears have downside near-term technical momentum. Prices are in a three-month-old downtrend on the daily bar chart. The next downside technical breakout objective for the lumber bears is pushing and closing prices below solid technical support at $285.00. The next upside price breakout objective for the bulls is pushing and closing prices above solid technical resistance at $305.00. First resistance is seen at yesterday's high of $295.20 and then at this week's high of $297.80. First support is seen at yesterday's low of $290.10 and then at $287.50.

Wyckoff's Market Rating: 3.5.

Wednesday, April 6--Jim Wyckoff's Morning Web Log

* JIM'S MARKET THOUGHT OF THE DAY *

Gold futures hit a fresh all-time record high overnight, while silver hit a new 31-year high. The precious metals are rallying in part due to oncerns regarding heightened inflation. The fact the precious metals are rallying strongly bodes well for other commodity market bulls. However, inflation is the enemy of stock and bond market bulls.--Jim

STOCK INDEXES

S&P 500 futures: Prices hit a fresh six-week high overnight. The shorter-term moving averages 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 are neutral to bullish early today. Today, shorter-term technical resistance comes in at February high of 1,342.80 and then at 1,350.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,326.20 and then at 1,314.80. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 6.0

Nasdaq index futures: The shorter-term moving averages 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 are neutral early today. Shorter-term technical resistance is located at the overnight high of 2,346.75 and then at last week's high of 2,358.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,330.00 and then at this week's low of 2,318.25. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 6.0

Dow futures: Prices hit a fresh nearly three-year high overnight. Sell stops likely reside just below support at 12,330 and then more stops just below support at Tuesday's low of 12,295. Buy stops likely reside just above technical resistance at 12,400 and then at 12,450. 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 are neutral to bearish early today. Wyckoff's Intra-Day Market Rating: 6.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Shorter-term moving averages 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 are neutral early today. Shorter-term resistance lies at the overnight high of 120 1/32 and then at 120 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week's low of 119 21/32 and then at last week's low of 119 11/32. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

JUNE U.S. T-Bonds

132 14/32--lifetime high
123 22/32--Previous Month's high
121 12/32--second pivot point resistance
120 28/32--previous day's high
120 27/32--18-day moving average
120 20/32--first pivot point resistance
120 8/32--9-day moving average
120 7/32--4-day moving average
120 5/32--100-day moving average
120 5/32--pivot point
119 29/32--previous day's close
119 21/32--previous day's low
119 13/32--first pivot point support
118 30/32--second pivot point support
118 5/32--previous month's low
115 7/32--lifetime low

June U.S. T-Notes: Shorter-term moving averages 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 are neutral early today. Shorter-term resistance lies at Monday's high of 119.00.0 and then at this week's high of 119.14.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 118.21.0 and then at last week's low of 118.09.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.0

JUNE U.S. T-Notes

126 10/32--lifetime high
121 26/32--previous month's high
119 23/32--18-day moving average
119 22/32--second pivot point resistance
119 18/32--100-day moving average
119 13/32--previous day's high
119 7/32--first pivot point resistance
119 2/32--9-day moving average
119 --4-day moving average
118 30/32--pivot point
118 24/32--previous day's close
118 21/32--previous day's low
118 15/32--first pivot point support
118 6/32--second pivot point support
117 18/32--previous month's low
109 6/32--lifetime low

U.S. DOLLAR INDEX

The June U.S. dollar index is lower higher in early trading, with prices hovering near the recent contract low. Bears still 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 the overnight high of 76.12 and then at Tuesday's high of 76.40. Shorter-term support is seen at the overnight low of 75.77 and then at the contract low of 75.50. Wyckoff's Intra Day Market Rating: 4.0

CRUDE OIL

Crude oil prices are trading near steady in early trading today. Bulls still have the solid overall near-term technical advantage. In May crude, look for buy stops to reside just above resistance at this week's two-year high of $108.78 and then at $109.00. Look for sell stops just below technical support at the overnight low of $107.72 and then at $107.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Prices were mixed in overnight trading. Corn was weaker while wheat was near steady and soybeans were firmer. Corn is now technically overbought and due for a downside correction. Weather in the U.S. Midwest is a major factor in the grain markets. At present, wet weather forecasts for the Corn Belt are bullish for corn and dry weather in the Plains is bullish for wheat. Traders are awaiting USDA's monthly supply and demand report on Friday morning. That report is again expected to be bullish for the grains.

Markets experienced a third day of indecision, leaving things much as they were yesterday.

The S&P has an inside day doji with modestly higher volume (although volume well below that of late March and early April). Natural play is to trade break of 3-day high/low with a stop on the flip side of the break.

($SPX)

via StockCharts.com

The Nasdaq attempted a move into the breakdown gap, but it was quickly repelled, leaving the index back at gap resistance. Higher volume counts as an accumulation day, but point gains are what's really needed.

($COMPQ)

via StockCharts.com

The expectation was for the semiconductor index to drive higher on the back of the NSM takeover. Instead, the gains failed to break declining resistance, or get close to its 50-da MA.

($SOX)

via StockCharts.com

The failure of the semiconductor to break was enough to keep the lid on the reconstituted Nasdaq 100

via StockCharts.com

The Russell 2000 added another half a percentage point. The continuous sequence of up days offers some leeway on any subsequent weakness and retest of former resistance-turned-support. The gain in price is supported by the now decisive break of the MACD bearish divergence. Collectively, these are bullish developments in the face of general market indecision.

($RUT)

via StockCharts.com

So with Small Caps doing the legwork it looks like this rally still has plenty of fight. Should semiconductors clear declining resistance it will offer an opportunity for the Nasdaq and Nasdaq 100 to push into, and close their respective breakdown gaps. Eventually, Large Caps will be able to look beyond the currently threatened double tops and join Small Caps higher. Bulls still hold the dominant hand.

The Denver Post reported the opening on Saturday of stations offering compressed natural gas to drivers in Grand Junction and Rifle, towns along Interstate 70 in western Colorado, making it possible to drive a vehicle fueled by compressed natural gas from Denver to Los Angeles.

The Glenwood Springs Post Independent offered this account:

The use of CNG fuel on the Western Slope has long been stymied as a "chicken-and-egg" scenario. No one wanted to invest in CNG cars or trucks because there were no filling stations, but there were no filling stations because no one was driving CNG vehicles.

Kirk Swallow, owner of Swallow Oil and an investor in Rocky Mountain Alternative Fueling, has now changed that. Last year, Swallow won a $675,000 grant from the Governor's Energy Office to develop the Rifle station. He and his partners in Rocky Mountain Alternative Fueling covered the difference for the Rifle station, which cost about $900,000....

As part of the grant application, Swallow obtained commitments from local fleet operators to begin making vehicle conversions to CNG.

EnCana Oil & Gas (USA), Williams Production RMT and Bill Barrett Corp. all pledged to convert five to 10 vehicles a year to natural gas. Garfield County committed to converting a dozen vehicles. The city of Rifle and Colorado Mountain College are also running bi-fuel vehicles, which can run on CNG until that tank is empty, and the switch on the fly to burn gasoline.

Technological breakthroughs in drilling methods have turned natural gas into a resource that the United States has in abundance. But what is the appropriate role of government in promoting the transition to more use of this resource for transportation? The "chicken and egg" problem referred to in the Post Independent article is an example of what economists call a "network externality", for which it makes a lot of sense for the government to be a first mover in helping encourage the infrastructure necessary to enable market forces to take over.

The days when significant numbers of people drive from Denver to Los Angeles in a CNG-powered vehicle may still be a distant vision.

But I am glad that some people have that vision and are doing what they can to make it a reality.

Map of some CNG fueling stations and prices currently charged in the southwest United States. Source: CNG Prices.com

DJIA Industrial Average

April 5

Open: 12402.08

High: 12438.14

Low: 12353.34

Close: 12393.90

Change: -6.13 (-0.05%)

RSI: 81

MACD: 87

Strategy: Stocks in US remained quiet to move in a narrow range on Tuesday in absence of any major cues as investors were busy trying to interpret the minutes of Fed meet. DJIA is trying to regain feet above 12300 points.

Commentary:

U.S. stocks closed on a nearly flat note Tuesday, after trading in a narrow band for a major part of the day, even though some of the stocks failed to support the fresh rally in materials and closed lower.

The Dow Jones Industrial Average slipped just 6.13 points, or 0.05%, to close at 12,393.90. The S&P 500 slipped less than 1 point to 1,332 and the Nasdaq Composite edged up 2 points to 2,791, with materials leading the modest rally.

The Dow constituents which advanced in the session included Alcoa 2.79%, Intel 1.12%, Chevron 1.02% and Cisco 0.95%

However, the index laggards in the day included stocks like General Electric -0.97%, Boeing -0.97%, Proctor & gamble -0.95% and Caterpillar -0.95%.

An aggregate of 13 Dow constituents advanced in the day and another 13 stocks closed lower.

Amongst the major sectors, Industrials 1.05%, Tech 0.17% and Healthcare 0.14% closed higher in the day.

However, consumables, capital goods and financials remained as the laggards amongst the various sectors.

The market came under pressure after meeting minutes from the Federal Reserve raised speculation that the U.S. central bank could raise rates later this year.

However, the bright spot of the day came in shape of gains logged by semiconductor companies after Texas Instruments announced a $6.5 billion bid on Monday evening for rival National Semiconductor. Shares of National Semiconductor surged 72%.

Meanwhile, Nasdaq OMX Group announced Tuesday it will rebalance its tech-heavy Nasdaq-100 index, and slash Apple's weight by almost 40%. Apple shares slipped about 0.7%.

However, the readjustment also means a subsequent rise in weight of Google, Microsoft and Intel Corp. from May this year.

Shares of Expedia advanced 1.3%, after American Airlines announced the two companies will resume doing business together after reaching an agreement on airfare sales.

The market remained cautious following a surprise interest rate hike by The People's Bank of China and another downgrade of Portugal's sovereign debt.

Investors are now expecting the European Central Bank to announce plans to increase interest rates on Thursday.

The dollar advanced against the euro and the Japanese yen, but fell against the British pound.

Crude oil for May delivery slipped marginally to $108.34 a barrel.

Gold futures for June delivery surged $21.60 to another record high of $1,450.01 an ounce in non-inflation adjusted terms. Silver also gained to a new fresh high of $38.11 per ounce for June futures.

The Day Ahead

Wednesday

EIA Petroleum Status

EUR/USD

The Euro hit resistance close to 1.4250 against the dollar during Monday and edged weaker during the session, but trading ranges were narrow as markets took stock following recent events and continued to focus on prospective monetary policies. Existing yield spreads remained unhelpful for the dollar which certainly stifled buying support and limited recoveries.

In comments on Tuesday, Fed Chairman Bernanke stated that inflation would be pushed higher by rises in commodity and energy prices. The comments were relatively brief, but Bernanke did say that the inflation rise should be transitory. These remarks will dampen market expectations that the Fed will push towards a more aggressive policy in the near term. The latest FOMC minutes will be watched closely on Tuesday for evidence of splits within the Fed committee.

The latest European data recorded a decline in the Sentix investor confidence index to 14.2 for March from 17.1 the previous month and there will be further fears that rising energy prices will undermine business confidence and dampen growth.

For now, there is no sign that the ECB is pulling away from its planned increase in interest rates at this week's meeting. There will still be fears that rising energy prices will intensify inflation pressures and this poses a very important dilemma for the ECB given that growth doubts will also increase.� Overall, the bank is likely to be cautious and it should refrain from making definitive comments over future policy.

The Euro drifted lower in Asian trading with a move to just below 1.42, but ranges remained narrow.

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts
that�are up to�86% accurate�* 800-732-5407
If you would rather have the recent forecasts sent to you, please go here

Yen

The dollar found support on dips to below 83.90 against the yen during Monday and maintained a generally robust tone with a move back above 84 during the Asian session on Tuesday.

There was no further increase in US Treasury yields as Bernanke maintained a generally dovish tone, but the US currency still gained important support. There was further increase in using the yen as a funding currency as carry-trade activity remained high.

Underlying confidence in the Japanese fundamentals remains weak with further expectations that the bank will be forced to monetize government debt issues which could lead to substantial medium-term yen depreciation. The Japanese currency will gain some defensive support if fears that high energy prices will derail the economy increase. The dollar pushed to a high above 84.50 in Asian trading on Tuesday.

Sterling

Sterling hit resistance close to 1.6170 against the US dollar during Monday and weakened to test support near 1.61 in generally cautious trading. The Euro tested support below 0.88 against the UK currency before finding support.

As far as economic data is concerned, the PMI construction index edged slightly lower to 56.4 from 56.5 the previous month, but this was better than expected. The latest data showed that home owners continued to repay debt during the fourth quarter while the Chambers of Commerce survey showed that confidence remained fragile.

The PMI services data will be watched very closely on Tuesday and a combination of subdued activity, together with rising inflation would increase policy difficulties for the Bank of England while a strong outcome would make it difficult for the bank to resist higher rates. Trading activity is likely to be subdued ahead of Thursday's central bank interest rate decision, especially as there will be some speculation over an increase in rates.

Swiss franc

The dollar dipped to test support near 0.92 against the franc during US trading on Monday before finding support and rallying back to the 0.9240 area as the dollar secured some wider respite. The Euro was unable to break above 1.32 against the Swiss currency and dipped back towards the 1.31 area.

Global risk conditions will remain extremely important in the near term and the franc will tend to lose ground when confidence in the global economy increases. The position is finely balanced as defensive demand is liable to increase again if markets fear that high energy costs will trigger a renewed downturn.

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts
that�are up to�86% accurate�* 800-732-5407
If you would rather have the recent forecasts sent to you, please go here

Australian dollar

The Australian dollar was unable to make a fresh attack on 1.04 against the US dollar during Monday and there was a generally softer tone, but it did find support above the 1.03 level.

The latest trade data was much weaker than expected with a monthly deficit of AUD0.21bn for February compared with expectations of a substantial surplus and this was the first deficit for 10 months. The PMI services index remained below the pivotal 50 level which will maintain doubts over growth trends.

In contrast, there were no surprises from the Reserve Bank of Australia as it left interest rates on hold at 4.75%. The statement was broadly similar to the previous meeting with the central bank comfortable with the current stance.�

June live cattle closed down $0.32 at $120.92 yesterday. Prices closed near mid-range and saw mild profit-taking pressure after prices Friday hit a contract and all-time high, which was matched early on yesterday. Bulls still have strong upside near-term technical momentum. There are still no early technical clues to suggest a market top is close at hand. Cattle market bulls' next upside price breakout objective is to push prices above solid technical resistance at $122.50. The next downside technical breakout objective for the bears is pushing and closing prices below solid technical support at $118.00. First resistance is seen at yesterday's contract high of $121.50 and then at $122.00. First support is seen at yesterday's low of $120.47 and then at $120.00.

Wyckoff's Market Rating: 9.0

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts
that�are up to�86% accurate�* 800-732-5407
If you would rather have the recent forecasts sent to you, please go here

May feeder cattle closed down $1.02 at $138.37 yesterday. Prices closed near the session low on profit taking pressure after prices Friday hit a contract and all-time high. The bulls still have solid upside near-term technical momentum. There are still no early clues of a market top being close at hand. The next upside price breakout objective for the feeder bulls is to push and close prices above solid technical resistance at $140.00. The next downside price breakout objective for the bears is to push prices below solid technical support at $136.60. First resistance is seen at $139.00 and then at the contract high of $139.65. First support is seen at $138.00 and then at $137.50.

Wyckoff's Market Rating: 8.5

June lean hogs closed up $0.27 at $103.85 yesterday. Prices closed nearer the session high yesterday. Lean hog futures bulls have the strong near-term technical advantage. However, there is strong overhead technical resistance just above the market, at the contract high of $104.15. The next upside price breakout objective for the bulls is to push and close prices above solid chart resistance at $104.15. The next downside price breakout objective for the bears is pushing prices below solid technical support at $102.00. First resistance is seen at $104.15 and then at $104.50. First support is seen at yesterday's low of $102.90 and then at $102.50.

Wyckoff's Market Rating: 8.5

Tuesday, April 5--Jim Wyckoff's Morning Web Log

* JIM'S MARKET THOUGHT OF THE DAY *

Commodity markets are starting out Tuesday under some selling pressure as the U.S. dollar index is seeing a tepid short-covering bounce. My bias is that there is not strong downside price pressure left in the dollar index and that there is not much more upside left in the crude oil market, barring a fresh geopolitical shock to the market place.--Jim

STOCK INDEXES

S&P 500 futures: The shorter-term moving averages 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 are neutral to bearish early today. Today, shorter-term technical resistance comes in at the March high of 1,336.20 and then at the February high of 1,342.80. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,320.00 and then at 1,314.80. Sell stops are likely located just below those levels. Wyckoff's Intra-day Market Rating: 5.0

Nasdaq index futures: The shorter-term moving averages 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 are bearish early today. Shorter-term technical resistance is located at the overnight high of 2,343.00 and then at 2,350.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,318.25 and then at 2,300.00. Sell stops are likely located just below those levels. Wyckoff's Intra-Day Market Rating: 4.0

Dow futures: Sell stops likely reside just below support at 12,300 and then more stops just below support at 12,280. Buy stops likely reside just above technical resistance at Monday's high of 12,345 and then at the February high of 12,380. 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 are neutral to bearish early today. Wyckoff's Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Shorter-term moving averages are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators are bullish early today. Shorter-term resistance lies at 121 even and then at 121 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 120 5/32 and then at 120 even. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5
�
JUNE U.S. T-Bonds

132 14/32--lifetime high
123 22/32--Previous Month's high
121 8/32--second pivot point resistance
120 27/32--18-day moving average
120 27/32--previous day's high
120 27/32--first pivot point resistance
120 13/32--pivot point
120 13/32--9-day moving average
120 13/32--previous day's close
120 9/32--4-day moving average
120 6/32--100-day moving average
120 --previous day's low
120 --first pivot point support
119 18/32--second pivot point support
118 5/32--previous month's low
115 7/32--lifetime low

June U.S. T-Notes: Shorter-term moving averages are neutral early today. The 4-day moving average is above the 9-day. The 9-day is below the 18-day moving average. Oscillators are bullish early today. Shorter-term resistance lies at Monday's high of 119.14.5 and then at 119.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 119.00.0 and then at Monday's low of 118.28.0. Sell stops likely reside just below those levels. Wyckoff's Intra-Day Market Rating: 5.5

JUNE U.S. T-Notes

126 10/32--lifetime high
121 26/32--previous month's high
119 25/32--18-day moving average
119 24/32--second pivot point resistance
119 20/32--100-day moving average
119 15/32--first pivot point resistance
119 14/32--previous day's high
119 7/32--9-day moving average
119 7/32--previous day's close
119 6/32--pivot point
119 3/32--4-day moving average
118 29/32--first pivot point support
118 28/32--previous day's low
118 20/32--second pivot point support
117 18/32--previous month's low
109 6/32--lifetime low

U.S. DOLLAR INDEX

The June U.S. dollar index is slightly higher in early trading, on tepid short covering in a bear market. Bears still have the overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 76.50 and then at 76.70. Shorter-term support is seen at 76.00 and then at last week's low of 75.88. Wyckoff's Intra Day Market Rating: 5.0

CRUDE OIL

Crude oil prices are weaker in early trading today, on a corrective pullback from recent gains. Bulls still have the solid overall near-term technical advantage. In May crude, look for buy stops to reside just above resistance at Monday's two-year high of $108.78 and then at $109.00. Look for sell stops just below technical support at the overnight low of $107.50 and then at $107.00. Wyckoff's Intra-Day Market Rating: 5.0

GRAINS

Prices were mixed to lower in overnight trading. Some profit taking is seen in corn, while soybean bulls are fading and need to show fresh power soon. Weather in the U.S. Midwest is a major factor in the grain markets. At present, wet weather in the Corn Belt is bullish for corn and dry weather in the Plains is bullish for wheat. Traders are awaiting USDA's monthly supply and demand report on Friday morning. That report is again expected to be bullish for the grains.