* LATEST MARKET DEVELOPMENTS *

Overseas it has been and will most likely continue to be a very quiet, pre-holiday trading day Monday. Most U.S. markets trade a half-day Monday, ahead of the Christmas holiday on Thursday. Investors and traders continue to worry
about the U.S. fiscal cliff negotiations that have stalled and now with only a few days left for U.S. lawmakers to reach a deal. 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. There are no major U.S. economic reports due for release Monday.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are weaker in early trading today. Bulls have faded as a four-week-old uptrend on the daily bar chart has been negated. 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 the overnight high of 1,424.10 and then at 1,433.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,417.50 and then at 1,406.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are lower early today. Bulls have 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 the overnight high of 2,662.75 and then at 2,675.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Friday’s low of 2,636.25 and then at 2,625.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

Dow futures: Prices are lower early today. Bulls are fading. Sell stops likely reside just below technical support at Friday’s low of 13,060 and then at 13,000. Buy stops likely reside just above technical resistance at Friday’s high of 13,160 and then at 13,200. Shorter-term moving averages are still 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: 4.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today. Bulls are trying to recover from recent losses but have more work to
do. 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 neutral early today. Shorter-term resistance lies at the overnight high of 147 14/32 and then Friday’s high of 147 23/32. Buy stops likely reside just above those levels. Shorter-term technical support lies the 147 even and then at 146 24/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

March U.S. T-Notes: Prices are weaker early. Bulls are trying to forge a market bottom but have more heavy lifting to do. 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 neutral early today. Shorter-term resistance lies at the overnight high of 132.15.0 and then at Friday’s high of 132.20.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 132.08.0 and then at Friday’s low of 132.02.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The March U.S. dollar index is lower in early U.S. trading. Bears still have the solid overall near-term technical advantage. Prices last week hit a three-month low. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 79.76 and then at 80.00. Shorter-term support is seen at Friday’s low of 79.34 and then at last week’s low of 79.01. Wyckoff’s Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

Crude oil prices are slightly lower early today. Bulls and bears are struggling for near-term technical control, with neither gaining much headway. In February Nymex crude, look for buy stops to reside just above resistance at $89.00 and then at $90.00. Look for sell stops just below technical support at $88.00 and then at $87.50. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were firmer in overnight trading, on more short covering. The grain market bulls have faded badly recently and bears still have some 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.