U.S. stocks decline as commodities slump

U.S. stocks declined 0.5% yesterday as commodities slumped with copper and oil (NYMEX:CLJ14) prices. Ukraine’s interim Prime Minister Arseniy Yatsenyuk meets U.S. President Barack Obama and Secretary of State John Kerry in Washington today. Billionaire investor George Soros stated more “radical” policies in Europe are required to avoid a “long period” of stagnation.

Equities: The E-mini SP500 (CME:ESM14) is down 1.5 points to 1863.75. The volume on the daily chart looks to be bearish. The key resistance level for the short term looks to be the 1867 area. We have a next key Fibonacci retracement level at 1828. This would not be a huge surprise if this level was approached. The market seems to be concerned about China, and also failed to reach the key 1900 level. We also keep in mind that the recent jobs report was strong, which could point to a continued tapering plan by the Fed, which could also be potentially bearish for the SP500.

Bonds: The U.S. 30-year Treasury Bonds are up 20 ticks to 132’03. However, the volume looks like this is a day without strong bullish conviction. Our tendency is to think bonds can head lower from here. 133’14 is a key resistance level for us. If the stock market decides to rally further, which we don’t necessarily think will happen for now, this could exacerbate bond selling. Ultimately, at the current point, it seems as though bonds don’t have that much directional conviction, as the potential bearishness of tapering may be balanced by the potential bullishness of the geo-political uncertainty with Russia and Ukraine.

Currencies: The Swiss Franc (CME:S6M14) is up 27 ticks to 114.25. Our next key level according to our market profile analysis is 115.30. The Franc may be overbought if it reaches that level. The Euro (CME:ECM14) is also up today, higher by 22 ticks to 138.92. We believe the Euro is strong overall, and could potentially make a run for 1.40. The MAR14 Aussie dollar is down 2 ticks to 89.63. It seems to be in a range recently, finding sellers above 91, but finding buyers close to 89. The U.S. Dollar Index (NYBOT:DXH14) is down 4 ticks to 79.69. The U.S. Dollar Index may break below 79.50.

Commodities: After the USDA report on Monday, soybeans (NYBOT:JSK14) really tanked, and continue to do so this morning, trading $.31 lower to $13.82. wheat, however, is higher by $.19 to $6.78. May silver is up a solid $.31 to $21.15. Silver (COMEX:SIJ14) may head higher from here. WTI crude oil is down almost $2 to $98.32, after trading at around $105 just recently. Crude looks like it could head even lower from here. $97.90 is our next profile target below current levels.

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