* LATEST MARKET DEVELOPMENTS *

(Note: I’ve been posting daily dispatches on Twitter for quite some time. I invite you to follow me, and it’s free: @jimwyckoff )

European stocks were weaker Thursday and the Euro currency fell following a reported drop in German retail sales and rise in German unemployment. Italian government bond yields rose Thursday to multi-week highs. Still, the Euro currency is on a bull run versus the U.S. dollar and investor sentiment toward the European Union is on the upswing. Markets are still digesting the FOMC meeting that ended Wednesday afternoon with its official policy statement indicating a still very easy U.S. monetary policy–meaning continuing bond purchases by the Fed on a monthly basis. Wednesday’s surprisingly weak U.S. GDP report which showed economic contraction for the first time in over three years
is also on traders’ and investors’ minds. Many in the market place are calling the GDP report an anomaly and saying the next quarter U.S. GDP number will show economic growth. A fresh batch of U.S. economic data Thursday will be examined for further clues on the health of the U.S. economy. The market place is also focusing on Friday morning’s U.S. employment report for January. The key non-farm payrolls figure is forecast to come in at up 165,000 versus up 155,000 the previous month. The unemployment rate is forecast at 7.8%, which is unchanged from the previous month. U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, the employment cost index, personal income and outlays, and the ISM Chicago business survey.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady in early trading today and are hovering near a five-year high. Bulls still have the solid overall near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are bullish early today. The 4-day moving average is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at this week’s high of 1,505.90 and then at 1,515.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at this week’s low of 1,491.20 and then at 1,475.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are weaker early today on profit taking. Bulls still have the overall near-term technical advantage. The shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is located at the overnight high of 2,736.25 and then at this week’s high of 2,751.75. Buy stops likely reside just above those levels. On the downside, short-term support is seen at this week’s low of 2,716.25 and then at 2,707.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are near steady early today. Bulls still have the overall near-term technical advantage. Sell stops likely reside just below technical support at 13,800 and then at 13,750. Buy stops likely reside just above technical resistance at Wednesday’s high of 13,900 and then at 13,950. 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 to bearish early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are higher early today and are seeing a short-covering bounce after hitting a fresh contract low on Wednesday. Bears still have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are 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 to bullish early today. Shorter-term resistance lies at the overnight high of 143 24/32 and then at 144 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 143 7/32 and then at 143 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

March U.S. T-Notes: Prices are higher early today on short covering. Bears still have some downside near-term technical momentum. Shorter-term moving averages (4- 9- 18-day) are 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 131.18.0 and then at 131.24.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.08.0 and then at this week’s low of 130.30.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly firmer early today on tepid short covering in a bear market. Greenback bears still have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at the overnight high of 79.40 and then at 79.66. Shorter-term support is seen at this week’s low of 79.21 and then at 79.01. Wyckoff’s Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are weaker early today on some mild profit taking after prices hit a 4.5-month high on Wednesday. Bulls still have some upside momentum as a seven-week-old uptrend is in place on the daily bar chart. In March Nymex crude, look for buy stops to reside just above resistance at Wednesday’s high of $98.24 and then at $99.00. Look for sell stops just below technical support at Wednesday’s low of $97.32 and then at $97.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were weaker overnight on corrective pullbacks from recent gains. The key outside markets are mildly bearish today–firmer U.S. dollar and weaker crude oil. Traders will closely scrutinize today’s weekly USDA export sales report. Dry weather in Argentina and the U.S. Plains and Corn Belt is still bullish for the grains.