* LATEST MARKET DEVELOPMENTS *

The feature in the market place overnight is a slumping U.S. dollar index, which is sharply lower and poised to close at a seven-week low close Friday, amid no apparent new fundamental development behind the strong price move.

China’s stock market rose overnight on easing concerns about higher short-term interest rates in China. Japan’s Nikkei index saw some profit taking after hitting a six-year high this week.

Otherwise, it was mostly quiet in the markets overnight, amid the holiday season. Look for generally thin volumes and lackluster trading conditions Friday and for most of next week.

The geopolitical situation worldwide remains relatively calm. That condition is not likely to persist and one has to wonder where and when the next flare-up will occur.

The U.S. economic calendar is light Friday and includes the weekly DOE energy stocks report.

Wyckoff’s Daily Risk Rating: 5.0 (No major headline risk today, as holidays are keeping many traders and investors away and making trading volumes thin.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

–Jim Wyckoff

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower in early U.S. trading, on mild profit taking after hitting a record high on Thursday. 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 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 Thursday’s record high of 1,837.50 and then at 1,850.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Thursday’s low of 1,829.60 and then at 1,815.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are slightly higher early today and poked to another 13-year high overnight. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is located at the overnight high of 3,584.50 and then at 3,600.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Thursday’s low of 3,568.25 and then at Tuesday’s low of 3,561.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5

Dow futures: Prices are slightly higher early today and poked to another record high overnight. Buy stops likely reside just above technical resistance at 16,450 and then at 16,500. Sell stops likely reside just below technical support at 16,400 and then at Thursday’s low of 16,350. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today and hovering near the contract low. The bears have the solid overall near-term technical advantage as prices are in a two-month-old downtrend on the daily bar chart. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at the overnight high of 128 24/32 and then at 129 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the contract low of 128 1/32 and then at 127 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 slightly lower early today and hovering near Thursday’s 3.5-month low. Prices are in a two-month-old downtrend on the daily bar chart. 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 bearish early today. Shorter-term resistance lies at the overnight high of 123.07.0 and then at Tuesday’s high of 123.17.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at Thursday’s low of 122.29.0 and then at 122.24.0. 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 sharply lower early today. The greenback bears have regained downside momentum. Slow stochastics for the dollar index are bearish early today. The dollar index finds shorter-term technical resistance at 80.250 and then at 80.500. Shorter-term support is seen at the overnight low of 79.82 and then at the December low of 79.500. Wyckoff’s Intra Day Market Rating: 3.0

NYMEX CRUDE OIL

February Nymex crude oil prices are slightly higher early today and hit a two-month high overnight. Bulls have the overall near-term technical advantage. In February Nymex crude, look for buy stops to reside just above resistance at the overnight high of $99.77 and then at $100.00. Look for sell stops just below technical support at $99.00 and then at this week’s low of $98.53. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were firmer overnight on a short covering bounce following selling pressure on Thursday. Worries about Chinese demand for U.S. corn and soybeans, amid recent rejections of U.S. shipments, is bearish. Also, South American growing weather in corn and soybean regions is mostly favorable, and that’s bearish for futures prices. Technically, corn and wheat futures bears are in full control. Soybean bulls still have the near-term technical advantage, but have faded.