Today’s Market Guidance

Financial Overview:
The stock market generally remains right on the prior session's highs into the US Thursday morning opening. Apparently the market generally remains up beat toward near term US economic prospects and apparently the impact of Washington is still thought to be waning. With some critical Wal-Mart news expected early this morning, the equity markets could be presented with a number of different readings on the economy. While the trade will go over the Wal-Mart news in search of information on the US consumer, we suspect that the initial and ongoing claims data will still be seen as the most critical news of the day. However, it is possible that the US PPI reading could end up being a slight negative for stocks, as the initial expectations are calling for a gain of just under 1% and that might fan the talk of the start of tightening moves by the US Fed. However, if the recent pattern of favorable numbers holds, and the European trading session ends without fresh incendiary charges against Greece, we suspect that the bull camp is destined to remain in control. However, it would appear as if upside momentum has narrowed somewhat, perhaps because the market is no longer oversold and as undervalued as it was at the beginning of February. In order to push up in a noted fashion again today probably requires claims data that prompts headline chatter of an improvement in the US jobs sector.

DOW:
The March Mini Dow has seemingly entrenched itself above the quasi even number level of 10,250 on the charts. There would seem to be little resistance in the March Mini Dow until the 10,591 level but we detect a slight waning of upside momentum. As mentioned already, the market seems to need ongoing help from the data and perhaps even from Wal-Mart earnings to forge anything beyond slow grinding gains today. There is some forward movement on financial market oversight push that seems to favor the Fed as the overlord in charge of monitoring systematic risk, but that news doesn't seem to be undermining sentiment in the equity markets. In conclusion, the path of least resistance is pointing upward and critical support in the March Mini Dow is now seen down at 10,266.

Rising stochastics at overbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The near-term upside objective is at 10351. The next area of resistance is around 10334 and 10351, while 1st support hits today at 10266 and below there at 10215.

S&P:
While other sectors of the market managed to make fresh new highs for the move overnight, the S&P has not only failed to make a new high for the move but it also seems as if the March S&P is being held back by the even number 1100 level. However, there would appear to be enough scheduled data flows and residual optimism from corporate earnings prospects to leave the bull camp with the edge. On the other hand, as suggested before the market does appear to be losing upside momentum and that could mean slow grinding gains are ahead.

Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market's short-term trend is positive on the close above the 9-day moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 1105.62. The next area of resistance is around 1103.75 and 1105.62, while 1st support hits today at 1096.25 and below there at 1090.63.

NASDAQ:
While the Wal-Mart earnings look to dominate the equity markets early today, the Nasdaq is already benefiting from better than expected tech sector results from HP late yesterday. In fact, with HP numbers coming in stronger than expected off of favorable server and printer business activity, that would seem to be a slightly positive macro economic signal for the broader economy. The March Nasdaq has close-in support at 1805.75, with little in the way of resistance seen on the charts until the 1819.75 level.

US Dollar:
The March Dollar Index attempted to make a fresh new high for the move overnight, but failed and for the skeptics of the Dollar bull trend, that might present a quasi triple top formation. However, we have to leave the edge with the bull camp, as the Dollar seems to be getting buying interest off signs of US growth and also from any signs of ongoing global slowing. With Greece overnight suggesting that government austerity efforts might result in violent protests, the Dollar is probably getting some minor flight to quality buying interest this morning. With the markets scheduled to see a somewhat hot US PPI report and US claims data, we have to leave the edge with the bull camp, but it will be very important to the bull trend to see the Dollar rally today in the face of decent US numbers. If the Dollar rallies in the face of decent US numbers today, that would give a lot of fundamental credence to the bull case. In conclusion, seeing the Dollar rally off flight to quality issues and also from favorable US number flow would seem to suggest that the Dollar bulls have the two extremes in their court. Initial support in the March Dollar Index is seen at 80.41 today.

Gold:
With the outside market forces seeming negative this morning, it is difficult to determine the magnitude of the bearish impact from the news of further IMF gold sales. On one hand, the gold market has seen IMF gold sales in the past and the size of the remaining sale of 191.1 tons isn't an oppressive tally. However, the bear camp can suggest that a sale of physical gold by any central bank or quasi governmental entity is a negative to gold prices, especially in an environment where investment interest for gold has seemingly waned. Surprisingly the gold market did see an improvement in demand dialogue from the Indian gold market overnight, but with the lower US opening projections today, signs of gold demand are seemingly being swallowed up by the bearish forces. In fact, the Indian news overnight is probably more than offset by suggestions from Barrick that they have completed the lifting of their gold hedges. Even news from the BBC that famed speculator George Soros might have increased his gold holdings failed to alter the bearish overnight tilt in the gold market.

Silver:
The silver market appears to be under some pressure from outside market forces this morning. It is also possible that silver is seeing spillover selling pressure from the IMF gold sale news overnight and also from residual EU/Greece debt issue concerns. However, silver has continued to see a pattern of declining daily silver warehouse stock figures, but that news may not be important enough to overcome the outside market information. At least initially, Wal-Mart earnings news didn't seem to be positive to the US equity markets and that could mean that the silver trade will look to the initial and ongoing claims data as the most important economic news of the Thursday trade. In the end, the silver market continues to behave like a physical commodity market in need of fairly constant macro economic support from the US data front. On the other hand, if favorable US economic data prompts the US Dollar to rise to the highest level since last July, the silver bulls could be cheated out of support from good US numbers. Unfortunately, the silver market appears to be facing a conundrum from various outside market forces.

Crude Oil:
Crude oil has fallen back in the early going with the market under some pressure from a report showing higher fuel supplies along with a firmer dollar reducing investor's risk appetite for oil. With global equity markets trading flat to lower and throwing off a slightly less optimistic macro economic view, a selling bias in crude oil has taken hold. Profit taking in crude oil has surfaced following yesterday's API report showing gains in both gasoline and distillate stocks which more than offset the unexpected 63,000 barrel decline in crude oil supplies. It was particularly bearish to see that a rise in refinery operations quickly outpaced fuel demand even as cold temperatures should have boosted winter heating needs. With the API report clearly showing the internal fundamentals of the oil market remains bearish, April crude oil could give back a good portion of this week's gains if today's EIA report (released at 10:00 am central) backs the readings given by API. Most traders expect the EIA report to show a 2 million barrel rise in crude oil stocks and higher gasoline supplies and this combination could certainly provide an additional selling incentive. In yesterday's trade, oil markets were able to hold onto gains since firm equity markets seemed to offset the strength in the Dollar which rose on stronger than expected economic news. But with the minutes from the Fed meeting showing the Fed to be on the verge of starting to extract the emergency liquidity added during the economic crisis, oil markets may be coming more concerned that firming US interest rates ahead could hinder a recovery in oil demand. Today's economic reports on jobless claims, inflation, leading indicators and regional manufacturing will provide additional economic insight that is likely to impact oil trading. But if the Dollar gains on more good economic news in anticipation that the Fed will raise rates sooner than expected, oil could certainly come under more currency connected selling unless equity markets can provide a strong bullish offset. If today's EIA report continues to show oil demand to be weak, it's clear that the pace of the economic recovery in the US could leave fuel consumption anemic for some time. And if that's the case, then April crude oil above $75 would seem to be above its fundamental value. We suspect there is a good chance that the EIA and economic news could work against the oil markets today. Unfortunately for the bull camp the next significant support level for April crude oil isn't until $75.60 and below there at $75.23 (200 day moving average) while overhead resistance is at $78.00 then $78.54.

Natural Gas:
The natural gas market is under some pressure in the early going weighed down by the weak price action in crude oil overnight. Despite mostly cold weather, April natural gas has been contained within a well defined range this month mostly between $5.55 and $5.20. But unless industrial fuel demand starts to recover, eventually we see the market heading back to the January and December lows this spring. It is already apparent that the market is starting to look beyond the winter season since the rally off last week's bigger than expected storage draw couldn't hold. With below normal temperatures being forecasted through month end, we certainly can't rule out seeing more temporary weather related rally attempts in natural gas. And in fact, April natural gas could certainly be lifted if today's report shows a bigger than expected storage decline of 191 bcf since it would be significantly larger than the 44 bcf draw seen last year and more than the 5 year average draw of 129 bcf. Better economic news seemed to underpin natural gas prices yesterday and if today's reports also point to better economic conditions, it may provide some price support to natural gas. But we also suspect selling in April natural gas will continue to surface in the $5.50 to $5.64 price range as traders seem to be anticipating natural gas storage levels to quickly rebuild once winter demand starts to fade. If industrial fuel demand stays weak, the rising number of natural gas rigs in operation will leave the supply outlook for natural gas bearish in the months ahead. Therefore, rallies in April natural gas back to $5.50 to $5.55 range look to be selling opportunities.