*OVERNIGHT DEVELOPMENTS*
The feature in the market place this week has been the sharprebound in the U.S. stock market, following last week’s bigdownside debacle. Several pundits are now proclaiming marketbottoms are in place for the U.S. stock indexes. Mostlyupbeat U.S. corporate earnings reports are adding to a“risk-on” mentality among traders and investors this week.Short covering in the stock index futures and bargainhunting in the individual stocks have been the themes so farthis week.
Asian and European stock markets have also rebounded thisweek, following the lead of the U.S. equities and also onspeculation a major injection of liquidity is coming soonfor the European Union, via new quantitative easing measuresfrom the European Central Bank.
A German government 30-year bond auction Wednesday fetched arecord low yield, averaging 1.77%. The falling German bondyields are a signal of a lack of confidence among Europeaninvestors in the collective European Union economic andfinancial conditions. Many market watchers reckon thefragile European Union periphery country economies will bethe next big, front-burner worry for the market place.
U.S. economic data due for release Wednesday includes theweekly MBA mortgage applications survey, real earnings, theconsumer price index, and the weekly DOE liquid energystocks report.
Wyckoff’s Daily Risk Rating: 6.0 (The market place is lessanxious this week. However, the matters that unnervedmarkets last week are still lurking and could quickly moveto the front burner.)
(Wyckoff’s Daily Risk Rating is your way to quickly gaugeinvestor risk appetite in the world market place each day.Each day I assess the “risk-on” or “risk-off” tradermentality in the market place with a numerical reading of 1to 10, with 1 being least risk-averse (most risk-on) and 10being the most risk-averse (risk-off), and 5 being neutral.
–Jim Wyckoff
U.S. STOCK INDEXES
S&P 500 December e-mini futures: Prices are modestly lowerin early trading, on a corrective pullback from the stronggains scored Monday and Tuesday. Bulls have gained goodupside technical momentum this week. The shorter-term movingaverages (4-, 9- and 18-day) are nuetral early today. The 4-
day moving average is above the 9-day. The 9-day is belowthe 18-day moving average. Short-term oscillators (RSI, slowstochastics) are neutral early today. Today, shorter-termtechnical resistance comes in at the overnight high of1,943.75 and then at 1,950.00. Buy stops likely reside justabove those levels. Downside support for active traderstoday is located at 1,925.00 and then at 1,915.00. Sellstops are likely located just below those levels. Wyckoff’sIntra-day Market Rating: 4.5
Nasdaq index futures: Prices are modestly lower in earlytrading, on a corrective pullback from strong gains postedMonday and Tuesday. Bulls have quickly regained upsidetechnical momentum. Shorter-term moving averages (4- 9-and18-day) are neutral early today. The 4-day moving average isabove the 9-day. The 9-day average is below the 18-day.Short-term oscillators (RSI, slow stochastics) are neutralearly today. Shorter-term technical resistance is seen atthe overnight high of 3,979.50 and then at 4,000.00. Buystops likely reside just above those levels. On thedownside, short-term support is seen at 3,950.00 and then at3,925.00. Sell stops are likely located just below thoselevels. Wyckoff’s Intra-Day Market Rating: 4.5
Dow futures: Prices are near steady in early U.S. trading,following the strong gains seen on Monday and Tuesday. Bullshave quickly regained upside momentum. Buy stops likelyreside just above technical resistance at 16,600 and then at16,650. Sell stops likely reside just below technicalsupport at 16,500 and then at 16,450. Shorter-term movingaverages are neutral early today, as the 4-day movingaverage is above the 9-day. The 9-day moving average isbelow the 18-day moving average. Shorter-term oscillators(RSI, slow stochastics) are bullish early today. Wyckoff’sIntra-Day Market Rating: 5.0
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer early today. Bullsstill have the overall near-term technical advantage.Shorter-term moving averages (4- 9- 18-day) are stillbullish early today. The 4-day moving average is above the9-day and 18-day. The 9-day is above the 18-day movingaverage. Oscillators (RSI, slow stochastics) are neutralearly today. Shorter-term resistance lies at the overnighthigh of 143 8/32 and then at 143 16/32. Buy stops likelyreside just above those levels. Shorter-term technicalsupport is seen at the overnight low of 142 17/32 and thenat this week’s low of 142 12/32. Sell stops likely residejust below those levels. Wyckoff’s Intra-Day Market Rating:5.5
December U.S. T-Notes: Prices are near steady in earlytrading. Bulls still have the overall near-term technicaladvantage. Shorter-term moving averages (4- 9- 18-day) arebullish early today. The 4-day moving average is above the9-day and 18-day. The 9-day is above the 18-day movingaverage. Oscillators (RSI, slow stochastics) are neutralearly today. Shorter-term resistance lies at the overnighthigh of 127.28.0 and then at 128.00.0. Buy stops likelyreside just above those levels. Shorter-term technicalsupport lies at the overnight low of 127.16.5 and then atthis week’s low of 127.12.5. Sell stops likely reside justbelow those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher in early trading.Bulls have the overall near-term technical advantage and areregaining some upside momentum now. Slow stochastics for thedollar index are bullish early today. The dollar index findsshorter-term technical resistance at the overnight high of85.665 and then at 85.750. Shorter-term support is seen atthe overnight low of 85.325 and then at 85.000. Wyckoff’sIntra Day Market Rating: 6.0
NYMEX CRUDE OIL
December Nymex crude oil prices are firmer early today asthe market tries to stabilize after hitting a more-than-two-
year low last week. Bears are still in firm overall near-
term technical control. Look for buy stops to reside justabove technical resistance at Tuesday’s high of $83.26 andthen at $84.00. Look for sell stops just below technicalsupport at the overnight low of $82.27 and then at Tuesday’slow of $81.57. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Markets were firmer in overnight trading, led on the upsideby the soybean complex. Soybean meal prices are screaminghigher, which is a solid clue the soy complex has put in aharvest low. Corn prices also hit a six-week high Tuesday,with wheat hitting a five-week high Tuesday. Recent near-
term technical developments suggest market bottoms are inplace in grains. However, don’t look for strong priceuptrends to occur, but more likely a sideways grind in thecoming weeks.
