Today's Market Guidance

Financial Overview:
While many US measures managed to make higher high moves overnight, the bull camp isn't firmly in control of prices into the Wednesday US trade. Surprisingly there were rather robust gains in many Asian equity markets overnight but that hasn't translated into a distinctly bullish sentiment around the globe. The bull camp has to be disappointed with the markets initial reaction this morning, especially given the significantly better than expected Apple earnings last night and the mostly positive UK jobless results that were released this morning. We suspect that the market is fearful of upcoming negotiations between Greece, EU Ministers and the IMF, as certain parties within the EU are postured to restrict their input into the Greek bailout. It is also likely that many market participants are unwilling to step back into the equity markets, until it is safe to assume that a world wide witch hunt on banks and financial institutions has been averted. One should expect the tech sector to remain in favor, in the wake of the Apple news and the new all time high in Apple shares and it would also appear as if the market can count of ongoing strength from oil and natural resource related shares. Therefore the bulls have a slight edge, but many are looking over their shoulders to the EU debt crisis.

Dow:
The June Mini Dow has managed a fresh new high for the move (even though the move is technically only in its third day) and that should give the bull camp a slight edge. Unfortunately the Mini Dow comes into the action today sitting almost at the middle of the up trend channel and that means up trend channel support is seen all the way down at 10,960, with that support level rising to 10,983 on Thursday. The top of the up trend channel today is seen up at 11,158. In order to propagate the upward march in the Mini Dow the market needs to see calm on the Euro zone debt issue front and perhaps the market also needs to see confirmation from the US numbers Thursday that the US economy continues to recover, despite the big anxiety elements present in the marketplace.
Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's close above the 9-day moving average suggests the short-term trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 10996. The next area of resistance is around 11109 and 11135, while 1st support hits today at 11039 and below there at 10996.

S&P:
While the S&P did manage a new high for the move overnight, the S&P was unable to hold the overnight attempt to rally and that in turn would seem to leave a critical pivot point on the charts at the 1205.40 level. It would seem like slack to weak action in European financial shares is in turn serving to undermine the early US trade in the S&P. In other words, good news in the market is being countervailed by ongoing concerns from either Goldman or Greece. The inability to hold the 1205.40 level, could leave little in the way of support on the charts until the 1201.30 level in the June S&P. The trend is expected to remain up, but we get the sense that the upward track in prices will take place within a very choppy two sided market.

Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. The next downside objective is 1190.94. The next area of resistance is around 1211.37 and 1214.43, while 1st support hits today at 1199.63 and below there at 1190.94.

Nasdaq:
Not surprisingly, the Nasdaq has not only managed a new high for the move but it technically managed to reach a fresh new high for the year overnight. Clearly the out of the park Apple earnings news gave the market the majority of its lift, but we suspect that earnings from E-bay might be a little disappointing, as other tech sector earnings were softened by a pattern of poor advertising activity. At least in the near term, the path of least resistance is expected to remain up, with close in support today seen at 2030.00. In order for the Nasdaq to continue upward, the rest of the market will have to confirm with new highs for the year in the coming two trading sessions.

Bonds:
The Treasury market generally forged a tight trading range yesterday but surprisingly the market managed to forge some gains despite the strength in the US equity markets. Therefore, a bit of bullish flight to quality mentality seems to have remained in place. We suspected that the market would retain its bullish stance, as the Greek debt issue is probably going to remain an issue well through a Thursday IMF/EU meeting. If the bear camp had decent footing, a decline in the UK jobless claimant count of 32,900 for March overnight would have been cheered by the markets as a sign that another country might be poised to turn the corner on the employment front. However, US Treasuries in Asia overnight did so show weakness as a result of rather noted gains in Asian equity markets and that highlights a market that is paying close attention to the ebb and flow of outside markets. In looking ahead to the Wednesday US Treasury market action, the trade isn't seeing definitively strong equity market action from Europe or from the early US trade and that is a little surprising considering the much better than expected earnings from Apple. The US economic report slate remains mostly empty today, with the Fed Beige book this afternoon expected to give a retroactive view from the Fed, which again in testimony indicated that US rates were still going to be held low for an extended period of time. All things considered, we can't argue against more minor hard fought gains on the charts, as the improvement in the economy is apparently being discounted in favor of residual concerns toward Greece and Goldman. One could point to an up trend pattern of sorts on the June Bond chart and that would give up trend channel support at 116-03 today, with that level rising to 116-08 on Thursday. We continue to see initial resistance in June bonds at 116-28 and again at 117-06. The June Notes also seem to be in the midst of a weak upward bias, with up trend channel support today pegged at 116-22 (that is right on the early Wednesday lows). Therefore it is possible that notes are facing a bit of vulnerability on their charts and that in turn could mean that Notes are destined to lose to bonds. While we give the bull camp a minor edge today, we suspect that edge is destined to wane in the Thursday action, as the market is expecting to see some type of gain in existing home sales readings and it is possible that the US claims data will return to a recovery prospect. Furthermore, the market will get some fresh detail on upcoming US Treasury supply and that could be just enough bearish news to result in a downside shift in notes, which we assume would then turn up the selling pressure on Bonds.

Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The upside daily closing price reversal gives the market a bullish tilt. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside objective is at 117-050. The next area of resistance is around 117-010 and 117-050, while 1st support hits today at 116-180 and below there at 116-060.

US Dollar:
The Dollar has been able to hold onto much of its gains earned over the past few days, but seems to be missing the sort of fuel that resulted in the aggressive early April run up. With the skies over Europe opening up, no fresh news out of the Goldman situation and with a lack of US economic numbers until tomorrow, the April 19th highs might restrict the trade. Risk aversion was a key element of the Dollar's recovery from its recent lows and while a certain amount of risk aversion remains in place, there does appear to be a number of holes in the Dollar bull's case. In addition, strength in the physical commodity markets overnight is an indication that some funds are moving away from the safety of the Dollar and into riskier areas. While a sharp move during the session is not out the realm of possibility, we expect a further consolidation in the Dollar, as the market prepares for tomorrow's US economic numbers and waits for real news from the EU/Greece/IMF negotiations. We also think that weaker US equities have given the Dollar a lift, but with the Pound, Canadian and Yen also higher today, that has clearly removed some of the Dollar bulls thunder. Resistance is seen at 81.40 and support is likely to be solid at 81.20 for a fairly tight expected range today in the Dollar.

Euro:
The June Euro was able to benefit from the reopening of airspace over Europe, but that hasn't allowed the Euro to throw off the downward tilt on the charts. Apparently the EU/IMF mission to Athens is expected to take up to 10 days to negotiate with the Greek government, and that seems to leave fear instead of optimism in place for the Euro. In the wake of the volcano-related problems that have blown into Europe there is probably a good chance that some sort of agreement will be reached. A recent stretch of decent economic numbers from within the Euro Zone, along with some strong global stock market action could lead many in the market to believe that the double-bottom from late March/early April should be able to hold in the Euro over the near-term. Even so, the June Euro would likely need to wait until an agreement is reached in Athens before we see prices make a strong run back up to the 1.36 level.

Yen:
While Japanese officials continue to be cagey in regards to future monetary policy, the June Yen continues to be undercut by ideas that easier Japanese rates are going to come rather quickly. Given how much rhetoric was used over the Chinese Yuan revaluation earlier in the month, it has been interesting to see how that issue faded into the background when other news hit the market. Although the June Yen may find some support near the 106.60 level over the next few days, look for another test of the early April lows when and if the Bank of Japan steps in.

Gold:
The gold bulls are suggesting that gold is capable of rallying further, despite the threats thrown off by the EU debt crisis and from the US financial sector legal wrangling, but that also highlights the importance of outside market action in determining the direction of gold prices. With the Greece situation entering into negotiations between Greek, EU and IMF officials, the headline flow on that subject is likely to intensify. Many traders fear negative headlines initially, as certain EU members work to reduce their contribution and exposure to Greece. However, the market is starting to see potential contributions defined in the Press from France and the IMF does seem to be committed to providing assistance and that could dampen some anxieties. The gold market is seeing talk of the prospect of increased output from a key South African gold mine, but the gold market hasn't recently taken much of a cue from physical supply side news. There are more signs of increased investment interest in precious metals newswires overnight and apparently that is initially countervailing ideas that global growth might continue to be tripped up by volcanic ash, debt turmoil or legal wrangling. Comex Gold Stocks were 10.105 million ounces down 31,159 ounces.

Silver:
Unlike the gold market, the silver market saw news overnight of a decrease in physical silver supply from a prominent silver producer but that type of news recently hasn't been given much credence. In other words, the focus of the silver market seems to remain fixated on the demand side of the equation. Some analysts are suggesting that press coverage of investment interest in silver is on the rise this week and that issue seemed to be in place in the early April rally. The bear camp seems to be confident in some upcoming turmoil from the Greece/EU/IMF negotiations, which are getting underway, especially with some analysts yesterday attempting to ramp up the projected Greece debt shortfall projections. At least in the early action today, the outside market impact on silver prices is mixed, as copper prices are lower and platinum prices are higher. Comex Silver Stocks were 114.637 million ounces down 298,372 ounces.

Crude Oil:
June crude oil has been able to take advantage of the market's re-entry into riskier assets as energy prices continue to recover from last week's washout. The surprisingly larger than expected draw in crude oil stocks shown by a private industry survey released after the close yesterday has helped to underpin this recovery attempt, but will likely need to be 'confirmed' by EIA storage data later this morning, before the market can extend itself back towards the overnight highs. News of a key gasoline pipeline in the US seeing over capacity for the fifth day in a row is an indication of solid demand. The gradual reopening of airspace over Europe should also be a benefit to energy prices, as the ash clouds ended up having a huge effect on worldwide air fuel demand and also on economic sentiment. In addition, Chinese energy demand has once again shown double-digit growth for the seventh month in a row and that growth is reiterated by news of solid gains in Chinese copper concentrate imports. However, the strength in US equity markets so far this week, will likely need to be maintained in order for energy prices to hold onto and add to their gains, as they have shown their vulnerability to bad news over the past few sessions. Also the potential for upset off the Greek debt issue and the next iteration in the Goldman saga leaves the bull camp a little concerned. In short, we think the market is capable of moving higher but it is possible that the June crude oil could see a trading range of $83.00 to $84.50 until the direction of the EU debt issue is resolved. If the EU debt issue is tamped down June crude oil prices could once again entrench in a range bound by $84.00 and $89.00.

Natural Gas:
June natural gas is in desperate need of some positive demand news, as the market remains unable to pull up and away from the $4.00 level. The tendency for large storage builds at this time of the year, before the air conditioning season may continue to weigh on prices over the next few days, but a surprisingly small number later this week could cause a short covering rally. With the gains in the US stock market providing little in the way of support yesterday, it is likely that natural gas prices may remain trapped within their recent trading range. In short, it will take really optimistic economic sentiment, sharply higher crude oil prices or tropical wave activity to send natural gas prices sharply higher. With some tropical activity possible in the month of May (call for a historical chart of tropical activity by month) we just think that the shorts are getting close to wearing out their welcome.

Cattle:
Another new high in beef prices and a positive tilt to the outside markets may be all that the market needs to see June cattle trade closer to the cash market. Cash cattle are bid at $97.00 in the southern plains but offers are up at the $100-$102 level. Cash is likely to come in at near $99.00, up from $86.00 a year ago, and beef prices are at their highest level since July, 2008. Signals from the cash market remain positive, as demand is better than expected, both export and domestic. June cattle inched lower in quiet trade yesterday. A higher trade in beef prices at mid-session was offset by fears that March and April placements onto feedlots will be higher than normal, which could bring more fed cattle to the market into the summer. Traders see Friday's Cattle on Feed report showing placements at 3-11% above last year, but marketings are also expected to be active at 2-6% above last year. As a result, On-Feed supply as of April 1st is thought to be in the range of 1.5% to 3.5% down from last year. The estimated cattle slaughter came in at 128,000 head yesterday, which was well above trade expectations and suggested strong demand from the packer to own live inventory. This brings the total for the week so far to 253,000 head, up from 251,000 last week at this time but down from 255,000 a year ago. While the cash market has rallied, the surge in beef prices has helped hold packer margins in the black, and this demand from the packer should help keep feedlot marketings active and weights down. In addition, the stiff discount of June cattle to the cash market will also encourage continued movement of lighter weight animals. Boxed beef cutout values were up $1.05 at mid-session yesterday and closed 93 cents higher at $168.03. This was up from $166.92 the prior week and is the highest beef price since July 18th of 2008. There are still no deliveries against the April contract.