* LATEST MARKET DEVELOPMENTS *

A feature in the market place this week has been the better risk appetite among world traders and investors. Major world stock markets have rallied recently, with many stock indexes at record or multi-year highs. The Russia-Ukraine crisis has not escalated recently and the rest of the world geopolitical front is presently quieter. Also, there is a quietly growing thought among many market participants that the U.S. and world economies may not be growing as fast as many had expected just a few months ago. That notion calls into question the Federal Reserve’s recent tapering program that is gradually winding down the quantitative easing of U.S. monetary policy. The above notion is an underlying bullish element for the stock markets.

European stock markets were stable overnight following their recent winning streak. Focus in Europe is turning to next week’s monthly monetary policy meeting of the European Central Bank. It’s widely believed the ECB will announce further monetary policy stimulus measures at that meeting. Recent weak European Union economic data and fears of deflation setting in for the EU are solid reasons for the ECB to make a move next week. Tepid investor demand for a German bond auction Wednesday is further evidence of the European markets being subdued ahead of next week’s ECB meeting.

China finance officials on Wednesday urged local governments to speed up their infrastructure spending, in an effort to prod China’s general economy. The annual GDP for China is around 7%. That’s about double the growth rate of other major world economies at present, but is below the annual growth rate in China of the past few years.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, and the weekly Johnson Redbook and Goldman Sachs retail sales reports.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine crisis has not escalated and the rest of the world is quieter regarding geopolitics.)

(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 Wycoff

U.S. STOCK INDEXES

S&P 500 June e-mini futures: Prices are firmer in early trading and hit another new record high overnight. Bulls are in solid overall near-term technical control. The shorter-term moving averages (4-, 9- and 18-day) are 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 bullish early today. Today, shorter-term technical resistance comes in at 1,925.00 and then at 1,935.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 1,908.25 and then at 1,900.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.5

Nasdaq index futures: Prices are higher early today and hit a nearly three-month high overnight. Bulls have the solid overall near-term technical advantage. 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 bullish early today. Shorter-term technical resistance is seen at the April high of 3,740.00 and then at 3,750.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 3,721.00 and then at 3,700.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.5

Dow futures: Prices are higher in early U.S. trading and hovering near the record high. Bulls have the solid overall near-term technical advantage. Buy stops likely reside just above technical resistance at the record high of 16,690 and then at 16,700. Sell stops likely reside just below technical support at Tuesday’s low of 16,625 and then at 16,600. 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 bullish early today. Wyckoff’s Intra-Day Market Rating: 6.5

U.S. TREASURY BONDS AND NOTES

June U.S. T-Bonds: Prices are higher early today. Bulls have the solid 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. 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 137 25/32 and then at the contract high of 138 4/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 10/32 and then at 137 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0 June U.S. T-Notes: Prices are higher early today. Bulls have the solid 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. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the May high of 126.05.0 and then at 126.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.28.0 and then at 125.24.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The June U.S. dollar index is firmer in early trading and hit a fresh seven-week high overnight. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at 80.600 and then at the April high of 80.770. Shorter-term support is seen at the overnight low of 80.380 and then at Tuesday’s low of 80.225. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

July Nymex crude oil prices are slightly higher in early U.S. trading. Prices are hovering just below the recent contract high. Bulls have the solid overall near-term technical advantage. In July Nymex crude, look for buy stops to reside just above resistance at the contract high of $104.50 and then at $105.00. Look for sell stops just below technical support at Tuesday’s low of $103.57 and then at $103.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Markets were mixed in overnight trading. Good planting progress for corn and soybeans recently is bearish for the grains. Soybean bulls still have the near-term technical advantage. Wheat and corn bears still have good near-term technical momentum. Focus in the grains will remain in weather patterns in the U.S. midsection.