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This is a sample of the comprehensive market updates that will be e-mailed to you every trading day when you subscribe to "Jim Wyckoff on the U.S. Markets."

April 18-Jim Wyckoff's Daily Markets Update

GENERAL COMMENT: The U.S. Federal Reserve shocked the financial markets today by reducing key interest rates by 0.5%. The move was so surprising because it occurred between the regularly scheduled FOMC meetings, where any rate changes are normally announced. The move indicates the Fed thinks the U.S. economy is in significant trouble and immediate economic stimulus in the form of lower interest rates is needed. What was surprising to many veteran market watchers is the fact that shortly after the Fed cut interest rates this morning, the bond market sold off sharply and the U.S. dollar index rallied sharply. These two moves ran counter to what one would normally expect. Lower U.S. interest rates usually are supportive for the bond market and a negative for the U.S. dollar. The sell off in the bond market can be explained by flowing of assets from bonds back into the stock market. But the rally in the dollar in the wake of lower U.S. interest rates was more difficult to justify. Traders must have come back to their senses because the dollar index did sell off shortly after it popped higher and bonds did move up well off their lows. The stock market indeed rallied strongly on the surprise rate cut. It will be important for stocks and the stock indexes to show some follow-through strength, or at least hold most of their gains, this week. If that's the case, then odds have increased that the bottoms are in place for the stock market and the indexes. Importantly for the commodities markets bulls, a turnaround in the stock market will likely lead to a change in consumer psychology--from a "retrenchment" mode to one that will see increased demand for commodities. Again, we'll have a better read on the stock market at the end of the week.

LIVESTOCK:

June live cattle closed 20 cents lower, at $72.27. Reports of lower cash cattle trade this week pressured the futures. Neither the bulls nor the bears have an edge in this market, at present. Expect choppy trading conditions to continue. Friday's USDA Cattle-on-Feed report is expected to show a big decline in animals placed on feed in March, due to the harsh winter. This will likely limit selling interest heading into the Friday afternoon report. The still-uncertain fundamental situation in the market, due to hoof-and-mouth disease concerns, will likely influence the market again. Next support, basis June, is seen at $71.75. First resistance comes in at the $72.80 level.

August feeder cattle closed off 22 cents today at $88.30. Prices scored a bearish "outside day" down on the daily bar chart. Expect more choppy and trendless trading in the near term. The hoof-and-mouth disease scare could again gyrate the livestock markets. Next support is seen at $88.00. First resistance is seen at the 88.75 level and then $89.00.

June lean hogs closed $1.25 lower today, at $71.52. This type of action is typical for a market at lofty price levels. No technical damage occurred today, but the increase in volatility does favor the bears, as it suggests a topping process in the market. Near-term fundamentals are still bullish. Farmers trying to do fieldwork will limit hog runs in the near term. Next resistance lies at the contract high of $73.25. First support is now located at the 71.00 level.

GRAINS:

July corn futures closed down 1/2 cent at $2.16 3/4 today. Crop progress reports out Monday afternoon showed corn planting progressing at an average pace, and this has prompted selling pressure this week. Prices pushed to a fresh two-week low today. For bulls to really gain some momentum, the July futures need to push above the $2.25 level. That's a tough chore at present. The FMD scare will keep traders on edge. First support is seen around the $2.15 area and then around $2.13. Next resistance is seen at the $2.22 3/4 level.

July soybeans closed up 2 1/2 cents today, at $4.36 3/4. Prices today matched the contract low scored a few weeks ago. There is just not much bullish news for traders to digest. The South American crop is being harvested and it's big, export demand is slack and there are still worries about more acres being switched to beans from corn, due to wet and cold weather in the Midwest. Technically, the door is open to fresh contract lows in the coming sessions. If the market can push above the $2.50 level, bulls will gain momentum, but that's a tall order at present. First support is now seen at the contract low of $4.32. First resistance is seen at $4.40.

July soybean meal closed up $2.30 at $151.60 today. Prices today scored a bullish "outside day" up on the daily bar chart and closed near the session high. My bias is that we put in the low for soybean meal in late March. But the upside is still limited because of slack demand. A weaker U.S. dollar would help this market out. The uncertainty surrounding FMD will continue to keep the bulls on shaky ground. Next resistance comes in around $154.00. Support is seen at 148.00.

July bean oil closed off 16 points at 15.24 cents today. Prices closed near the session low. This market has turned solidly bearish the past few weeks. Prices today pushed to another fresh seven-week low. Next support lies at the contract low of 15.11 cents. Next resistance is seen at 15.50 cents. This market is technically well oversold and due for at least a bit of an upside correction.

July Chicago wheat closed 2 1/4 cents higher at $2.79 1/4 today. Bulls needed to see an up-day today, and got it. They still have the edge, even though there were reports the cold snap that hit the Plains states this week did not caused significant damage to the wheat plants. My bias is that the downside is limited in the wheat market. First resistance now lies at $2.82. Next support is seen at $2.74.

K.C. July wheat closed up 2 cents at $3.28 1/4 today. Today's price action scored a bullish "outside day" up on the daily bar chart. Bulls have the edge in this market. Next resistance is seen at the $3.32 level. Next support is seen at $3.24.

July oats closed 3/4 cent lower at $1.14 3/4 today. Prices pushed to a new 2.5-month high Monday as bulls have gained some good momentum in oats. A solid four-week-old uptrend is in place on the daily bar chart. Next resistance now comes in at the $1.17 level. First support comes in at $1.14.

SOFTS:

July N.Y. sugar closed 6 points lower at 8.02 cents today. Bears still have the edge, but the recent increase in volatility at the lower price levels does favor the bulls. Next resistance comes in at 8.25 cents. First support is seen at 7.80 cents--today's low.

July N.Y. coffee closed 2.75 cents higher at 61.75 cents today. Prices today set yet another new contract low, only to pop sharply higher. This big "outside day" up on the daily bar chart will turn into a key reversal if there is follow-through price strength on Thursday. But that important "follow-through" has been tough to come by lately. As I had warned, the recent collapse in daily price volatility made me suspect a bigger price move was on the horizon, and we got it today. First resistance comes in at 65 cents. First support is seen at today's and the contract low of 58.80 cents.

July N.Y. cocoa closed $4 lower today, at $985. Prices closed near the session high again today, but matched a three-month low of $955 scored yesterday. Bears are gaining the near-term technical advantage. Bulls are fighting a market that sees a two-month-old downtrend line in place on the daily bar chart. Next resistance is seen at the $1,000 level. First support comes in at $955--today's low.

July cotton closed 67 points lower at 47.95 cents today. After a big push higher to a three-week high, cotton backed off and closed near the session low. Cotton is in a bear market and any rebounds like today are just selling opportunities for the bears. My bias is that we are not far from the bottom, however. Bigger trading range days like today also hint that a bottom is close by. Next support lies at 45.90 cents--the recent low. First solid resistance is seen around 50.00 cents.

July orange juice futures closed 5 points lower today, at 78.85 cents. Bears have the advantage as prices trade at lower levels and not that far above the recent contract low. Next support comes in around 78 cents. First resistance lies at 80.50 cents and then 81 cents.

July lumber futures closed up $8.00 at $275.50 today. The bull move continues as prices hit a fresh eight-month high today. The surprise interest rate cut by the Federal Reserve boosted lumber, as consumer demand will likely increase with lower interest rates. Expect more volatility. That's lumber. This is a classic bull market move in lumber. The next upside objective for the bulls is the $285.00 area. First support is now seen at the $265.00 area.

METALS:

June COMEX gold closed up $0.20 today, at $262.00. Prices did close well off the session low. The recent bigger trading ranges do favor the bulls. After making its biggest upmove in weeks on Monday, gold Tuesday gave back most of that move. Next resistance is now located at $265.00--Monday's high. First support is now seen at $258.00.

May silver closed off $0.003 today, at $4.365 an ounce. Just like gold silver can find no follow-through strength on any solid rallies. Next resistance is now seen at $4.46. First support is seen at $4.30.

May N.Y. copper closed 2.05 cents higher today, at 78.50 cents. The surprise cut in interest rates by the Federal Reserve boosted copper. That move by the Fed may have put the low in for copper. If the stock market can continue to rebound, odds are high that the copper market will, too. It will be important for bulls to keep today's gains, and build upon them in coming sessions. Next resistance is seen at 79.00 cents. Next support is seen at 76.25 cents--today's low.

ENERGIES:

June crude oil closed off $0.32 at $28.50 today. Prices this week reached a fresh two-month high but have backed off. A steep short-term uptrend on the daily chart was negated today. Next support is seen $27.00. Next resistance now lies at $29.40.

June heating oil closed 136 points lower today, at .7650. Prices pushed to a fresh 4.5-month high Monday and have backed off since. The bulls are still in command, but need to see some upside strength very soon to keep the edge. Next resistance is seen at 79.70 cents. Next support is seen at 75.00 cents.

June unleaded gasoline closed 79 points higher at 1.0220 today. Prices hit a new contract high again today and scored a bullish "outside day" up on the daily bar chart. Weaker crude and heating oil could limit further upside in gasoline, however. But bulls are in firm command heading into the peak demand season for gasoline. The market is still overbought on a short-term basis and some consolidation in the near term would not be surprising. Next resistance is seen at $1.03. First support is seen at 98 cents.

June natural gas closed off 9.3 cents at $5.21 today. Bulls were gaining momentum, until this two-day sell off. Bulls and bears are again at a short-term stand-off, which suggests more choppy trading conditions. Resistance is seen at $5.78 and first support is now at $4.96.

STOCKS, FINANCIALS, CURRENCIES:

The June Euro currency closed 38 points higher at .8844 today. Prices pushed to a new for-the-move and 4.5-month low today, before rebounding strongly in the wake of the surprise interest rate cut by the Federal Reserve. Bears still have the edge in the Euro, but today's rate cut by the Fed has given the bulls some encouragement. Worries about EU economies and a European Central Bank rate cut will continue to limit buying interest, however. Next support is seen at today's low of .8700. Next resistance is seen at .8950.

The June Japanese yen closed 62 points higher at .8237 today. The recent collapse in volatility makes me suspect a bigger price move is on the horizon. Bears are in command, but prices have made a modest climb up from the recent low. Longer-term charts show this market is not close to historically low levels. That means the downside could continue, however. Next support lies at the .7900 level. First resistance is seen at the .8300 area.

The June Swiss franc closed 5 points higher today, at .5790. Prices plunged to a new 4.5-month low today before rebounding in the wake of the U.S. interest rate cut. Prices did close near the session high. Bears have the advantage, but my bias is that prices won't deteriorate much more. Next support is seen at the .5629 level--today's low. First resistance comes in at the .5900 level.

The June Australian dollar futures closed 4 points lower at .5029 today. Prices did close near the session high and rebounded after the Fed cut U.S. interest rates. Bulls still need to show they have the power to keep prices trading at least sideways over the near term. A two-week uptrend line on the daily bar chart was negated today. Prices pushed to a fresh five-week high Monday. First resistance is seen at .5121 and then .5200 and first support at .4927--today's low.

The June Canadian dollar closed 18 points lower today, at .6394. Prices did close near the session high and were supported by the Fed U.S. rate cut. The bulls need to show some more upside momentum very soon to keep what little momentum they recently gained. The currency is near recent historic lows and I do not think there is much more downside. Next resistance is seen at the .6440 level. First support is seen at the .6353 level--today's low.

The June British pound closed 28 points lower at 1.4256. Trading has become more choppy and volatile at lower levels, which does favor the bulls. This currency was not that far above recent historic lows and I do not think there is much more downside in the sterling. Next support is seen at the 1.4172 level--today's low. Next resistance comes in at the 1.4400 level.

The June U.S. dollar index closed 39 points lower at 116.23 today. Prices scored a bearish "outside day" down on the daily bar chart today. This could have created a double-top reversal on the daily bar chart. See my "Hot Market" item on my website, where the dollar index is featured. Bulls are still in command, but my bias is that the upside is limited. The daily bar chart shows a choppy three-month-old uptrend line is still in place. Next support lies at the 115.50 level. First resistance is seen at the 117.0 area.

June U.S. T-bonds closed 6/32 higher today at 102 even. It was a very good day for debt market bulls. Bond prices got hammered shortly after the Fed's rate cut announcement this morning. However, the market rebounded strongly to post a bullish "outside day" up on the daily bar chart. If there is follow-through buying on Thursday, then a key reversal will be confirmed. Given the fact that this market was also oversold, technically, a good pop on the up-side would not surprise me. Fundamentals also don't argue for downside price action in bonds. Next resistance is seen at the 103 even area. First support is seen at today's low of 100 24/32.

The June U.S. T-note closed up 15.0 (32nds) today at 105.02.5. Like bonds, notes today scored a bullish "outside day" up and will confirm a key reversal with follow-through strength on Thursday. First resistance is now seen at the 105.16.0 level. First support is now seen at today's low of 103.20.5.

June S&P 500 futures closed 50.50 higher today, at 1246.00. The surprise interest rate cut by the Fed caught the shorts flat-footed and really burned them. Prices today pushed way above a stiff resistance zone at 1190-1210. That area now becomes a solid support zone. Some analysts are calling today's big move north a bear market price correction and an over-reaction to the cut in interest rates. That may be the case, and we'll have a much better gauge on the stock market and the indexes at the end of this week. If today's gains can be held and built upon Thursday and Friday, then odds have increased greatly that the lows are in place. If prices fizzle to end the week, then odds are high that today's push north was just a bear market correction. One thing that has impressed me with the market this week is the fact that it is shaking off some bad fundamental news. More dismal earnings news from the likes of Cisco Systems and others this week did not impact the stock market much. Any time bearish news fails to impact a market negatively, that's a positive signal for that all the bad news has been factored into the market. Let's see how the rest of this week plays out. First resistance is now seen at today's high of 1270.00. First support is seen at today's low of 1206.00.

Here's what the Commodity Futures Trading Commission (CFTC) says about trading futures (and I agree 100%): "Trading commodity futures and options is not for everyone. It is a volatile, complex, and risky business. Before you invest any money in futures or options contracts, you should: 1. Consider your financial experience, goals, and financial resources and know how much you can afford to lose above and beyond your initial payment. 2. Understand commodity futures and option contracts and your obligations in entering into those contracts. 3. Understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. 4. Know whom to contact if you have a problem or question.

Jim Wyckoff