Federal Reserve Chair Janet Yellen said last week the U.S. economy has further to go to achieve full health. The central bank will release on May 21 minutes from its latest meeting. Yields on Italian and Spanish bonds had their biggest one-day jump in almost a year last week as a selloff that started in Greece spread.
Equities: The e-mini S&P 500 (CME:ESM14) is trading up slightly to 1875.50 this morning, after bouncing off our key level of 1867. Again, we reiterate that 1867 is really our key level to watch in this market. We would not be surprised to see the market try to test the waters above 1900, however, we do believe that the market is susceptible to a downturn, especially with the Italian and Spanish bond yields possibly indicating more fear coming into the global markets.
Energies: WTI crude oil (NYMEX:CLM14) seems to have major bullish forces underlying the day to day price action. Today, it is up $0.91 to $102.93. We would not at all be surprised to see crude try to rally to $105, and possibly even $110. $100 could be the new floor this year for crude.
Bonds: The U.S. bonds are up 3 ticks to 137’17, hovering near recent highs of the month. Again, it looks like the bonds have been in an uptrend throughout 2014, and we don’t necessarily see anything now that will drastically change that course. Our initial key target level has been hit (138), thus in order for the bonds to head higher, we might need to see some type of stock market correction.
Currencies: The JPY/USD is up 37 ticks to 98.90, and our next key target higher according to our market profile analysis is just above 100. We will see the BOJ press conference tomorrow night, which may have a big impact on the yen . The USD is down 10 ticks to 80, while the euro (CME:E6M14) is up 19 ticks to 137.16. 137.80 is our next key chart-based resistance level for the euro. If the euro does rally to that level, we anticipate it coming right back down.
Commodities: Gold (COMEX:GCM14) is up $9 to $1,302, just slightly below a key resistance level of $1,307. Gold has been fairly quiet this year, and we anticipate for the short term gold to hover around $1,300, which seems to be a key magnet level. The grain markets are down today, with soybeans (CBOT:SN14) down $0.06 to $14.58 and corn (CBOT:CN14) down $0.02 to $4.81. Feeder Cattle (CME:GFQ13) continues its amazing strength, with this contract up again today to $1.942.