* LATEST MARKET DEVELOPMENTS *

It’s a “risk-off” trading day in the market place early Wednesday. Traders and investors are more keenly focused on the negotiations among U.S. lawmakers and President Obama regarding the so-called “fiscal cliff” tax increases and spending cuts that are approaching. Rhetoric coming from all U.S. lawmakers this week is not soothing to the market place–highlighted by Senate Majority Leader Harry Reid, who said late Tuesday there had been scant progress made in the negotiating process to resolve the matter. European and Asian stock markets, and the Euro currency were weaker overnight on the fiscal cliff worries. However, a well-subscribed Italian government debt auction Wednesday did somewhat assuage European investor fears. There is still a sense among many veteran politicos and market watchers that some type of deal will be reached soon to avoid the U.S. government going over the fiscal cliff. Meantime, in the Middle East there are growing tensions in Egypt, as its president awarded himself major powers last week, and the public did not like it. Protesting in the streets is occurring this week. This situation bears close watching and if it escalates, it will more significantly impact markets. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales, and the weekly DOE energy stocks report.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker early today. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral early today. Today, shorter-term technical resistance comes in at 1,400.40 and then at Tuesday’s high of 1,407.40. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,387.10 and then at 1,375.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker early today. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 2,644.75 and then at Tuesday’s high of 2,658.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 2,623.00 and then at 2,600.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are weaker early today. Sell stops likely reside just below technical support at 12,800 and then at 12,750. Buy stops likely reside just above technical resistance at 12,862 and then at 12,900. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today on flight- to-safety buying. Bulls have the overall near-term technical advantage and have regained upside momentum this week. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 150 6/32 and then at 150 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 149 19/32 and then at 149 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

March U.S. T-Notes: Prices are higher early today. Bulls are regaining upside momentum this week and have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 133.15.5 and then at 133.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 133.08.5 and then at 133.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher in early U.S. trading today, on flight-to-safety buying of the greenback. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.76 and then at 81.00. Shorter-term support is seen at the overnight low of 80.56 and then at this week’s low of 80.27. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today. A bullish rounding-bottom reversal pattern has formed on the daily bar chart. In January Nymex crude, look for buy stops to reside just above resistance at the overnight high of $87.34 and then at $88.00. Look for sell stops just below technical support at $86.00 and then at $85.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were lower in overnight trading, amid the “risk off” trader mentality in the market place, bearish outside market forces–firmer U.S. dollar index and weaker crude oil–and on corrective pullbacks from recent gains. Grain market bulls have been working to regain upside near-term technical momentum to suggest that near-term market lows are in place.