Twitter plunged 9.5 percent as about 480 million shares from insiders became eligible for sale. Twenty-six S&P 500-listed companies, including DirecTV, Discovery Communications Inc. and Mosaic Co., report earnings today. The U.S. trade deficit narrowed in March as exports grew by the most in nine months.
Equities: The E -mini S&P 500 (CME:ESM14) is down 2 points to 1873.75 on a somewhat quiet trading day. The recent trend still seems to be up, but 1880 seems to be a decent barrier for any further upside action. The last time the market dipped below 1850, we saw aggressive buying. We still would not be surprised to see the market try to test the 1900 level. One thing thatg could throw a wrench into the idea of 1900 being hit would be if the conflict escalated in Ukraine and Russia.
Bonds: The U.S. bonds are up 6 ticks to 135’29. Our volume indicators show 5 days in a row where buying volume has outnumbered selling volume. Our next key target for the bonds is 138. Especially if we see the S&P 500 not being able to hold above 1880 and potentially retest 1850, we could see the bonds rally to 138 if not higher.
Currencies: The forex market looks like the most active today, with the Pound getting closer to the 1.70 mark, up 126 ticks to 169.90. The Euro is up 55 ticks to 139.31, and the Yen is up 56 ticks to 98.51. We still believe the Yen is susceptible to a short covering rally to 100, possibly 101. The U.S. Dollar Index is down 39 ticks to 79.14. Even with the taper this year, the USD still has not found a sustained rally. We think the Yen could have an explosive move higher soon.
Commodities: Feeder cattle is up $.02 to $191.8. This market’s uptrend has been amazing, we would not be surprised to see the market head to $1.95. Coffee is down $.014 to $203.85, not being able to fund sustained buying above the $2.10 level. Gold is around unchanged levels at $1308, which is also a key moving average area. WTI crude oil is up $.58 to $100.06, while natural gas is up $.08 to $4.77. Geopolitical tensions could be the main driver of natural gas, and we could see a test of the $5 mark again soon. Soybeans are down 1% to $14.48, breaking a key level of $14.60. We could even see the market head back down to $14.20.