World Stock Markets Spooked Friday amid U.S. Fiscal Cliff Impasse

* LATEST MARKET DEVELOPMENTS *

In overnight action, U.S. stock indexes, Asian stocks and European stocks were lower, along with the Euro currency, as investors continued to worry about the U.S. fiscal cliff negotiations that have stalled. U.S. House of
Representatives Speaker Boehner late Thursday was forced to withdraw from consideration his “Plan B” budget plan that President Obama said he would veto. Boehner said he did not have the Republican votes to pass the measure. U.S. stock indexes spiked lower in the immediate aftermath of that news, but did rebound from the lower levels. U.S. lawmakers have until January 3 to come to agreement before the government falls off the fiscal cliff. Markets do not like uncertainty and most markets remain jittery as the deadline draws closer. Credit ratings agencies have recently warned that if the U.S. does go over the fiscal cliff it risks sovereign credit downgrades. In the European Union, surveys released Friday show that Germans and Italians are more pessimistic about their economies, while the French are a bit more upbeat. U.S. economic reports due for release Friday include durable goods orders, personal income and outlays, the Chicago Fed national activity index, the University of Michigan consumer sentiment survey, and the Kansas City Fed manufacturing survey.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are sharply lower in early trading today. Prices hit a fresh four-week low overnight. Bulls have quickly faded as a four-week-old uptrend on the daily bar chart has been negated today. The shorter-term moving averages (4-, 9- and 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at 1,433.00 and then at the overnight high of 1,441.20. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,406.00 and then at 1,400.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 3.5

Nasdaq index futures: Prices are sharply lower early today. Bulls have quickly faded. The shorter-term moving averages (4- 9-and 18-day) are still bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is located at 2,675.00 and then at the overnight high of 2,695.45. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 2,637.00 and then at 2,625.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 3.5

Dow futures: Prices are sharply lower early today. Bulls are fading. Sell stops likely reside just below technical support at this week’s low of 13,055 and then at 13,000. Buy stops likely reside just above technical resistance at 13,150 and then at Thursday’s high of 13,375. Shorter-term moving averages are bullish early today, as the 4-day moving average is above the 9-day and 18-day. The 9-day moving average is above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral early today. Wyckoff’s Intra-Day Market Rating: 3.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today on more short covering and some fresh safe-haven buying after hitting a two-month low Tuesday. Shorter-term moving averages (4- 9- 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 147 16/32 and then 148 even. Buy stops likely reside just above those levels. Shorter-term technical support lies the 147 even and then at the overnight low of 146 12/32. 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 on short covering and safe-haven buying after hitting a six-week low on Tuesday. Shorter-term moving averages (4- 9- 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 132.18.0 and then at this week’s high of 132.24.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 132.02.0 and then at this week’s low of 131.25.5. 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, on tepid short covering in a bear market. Prices Wednesday hit a three-month low. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 79.65 and then at 79.78. Shorter-term support is seen at the overnight low of 79.34 and then at this week’s low of 79.01. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are lower early today, on some profit taking and a corrective pullback from recent gains. In February Nymex crude, look for buy stops to reside just above resistance at $90.00 and then at the December high of $90.90. Look for sell stops just below technical support at the overnight low of $88.68 and then at $88.00. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were firmer in overnight trading, on some short covering. The grain market bulls have faded badly recently and bears still have downside near-term technical momentum on their side. Bulls are seeking some fresh, bullish fundamental inputs for the grains. Bullish news in the grains has been scarce recently.