* Latest Market Developments *

There’s a lot going on in the world market place Friday, on this last trading day of the week and of the month. There are three features Friday morning: U.S. stock indexes hit fresh record or multi-year highs overnight, the U.S. dollar index is surging, and gold prices have slumped to a four-year low. All have occurred in the wake of Wednesday afternoon’s FOMC statement that was deemed surprisingly hawkish on U.S. monetary policy.

The world equity markets and the greenback got an added boost overnight when the Bank of Japan announced further and somewhat aggressive monetary policy easing measures. The BOJ move is an attempt to ward off deflationary pressures that have wracked Japan’s economy for at least the past 15 years. The Japanese yen sunk on the news, but Japan’s Nikkei stock index rallied on the BOJ easing. Other Asian and European stock markets also rallied Friday.

In other overnight news, consumer price inflation in the European Union remains worrisomely low. Figures Friday showed October consumer prices were up 0.4%, on an annual basis, versus the 0.3% rise, year-on-year, seen in September. The core inflation rate in the EU was reported at up 0.7% in October compared to up 0.8% in September. Look for the European Central Bank to continue to look to monetary policy stimulus, in an effort to revive the moribund EU economy.

U.S. economic data due for release Friday includes the employment trends cost index, personal income and outlays, the ISM Chicago business survey, and the University of Michigan consumer sentiment survey.

Wyckoff’s Daily Risk Rating: 7.0 (The market place is in a significant “risk-on” mood Friday. Geopolitical risks have been moved to the back burner…for now.)

(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 December e-mini futures: Prices are sharply higher in early trading and hit a new record high. 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 bullish early today. Today, shorter-term technical resistance comes in at the overnight record high of 2,016.75 and then at 2,025.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,000.00 and then at the overnight low of 1,986.75. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 7.5

Nasdaq index futures: Prices are sharply higher in early trading and hit a 14-year high. 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 to bullish early today. Shorter-term technical resistance is seen at the overnight high of 4,155.75 and then at 4,175.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 4,125.00 and then at 4,100.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 7.0

Dow futures: Prices are sharply higher in early U.S. trading and hit a record high. Buy stops likely reside just above technical resistance at 17,300 and then at 17,350. Sell stops likely reside just below technical support at 17,260 and then at 17,200. 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 below the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are bullish early today. Wyckoff’s Intra-Day Market Rating: 7.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are lower early today. Bulls are fading amid the better risk appetite in the market place that is bearish for safe-haven Treasuries. 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 technical resistance is seen at 141 even and then at the overnight high of 141 19/32. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 140 20/32 and then at this week’s low of 140 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 December U.S. T-Notes: Prices are lower in early trading. Bulls are fading. 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 126.16.0 and then at the overnight high of 126.23.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at this week’s low of 126.06.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0

U.S. DOLLAR INDEX

The December U.S. dollar index is solidly higher in early trading and hit another three-week high overnight. Prices are very close to the recent four-year high. Bulls have the solid overall near-term technical advantage. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the October high of 86.870 and then at 87.000. Shorter-term support is seen at 86.500 and then at the overnight low of 86.230. Wyckoff’s Intra Day Market Rating: 7.5

NYMEX CRUDE OIL

December Nymex crude oil prices are weaker early today. Bears remain in firm overall near-term technical control. Look for buy stops to reside just above technical resistance at the overnight high of $81.27 and then at $82.00. Look for sell stops just below technical support at $80.00 and then at last week’s low of $79.44. Wyckoff’s Intra-Day Market Rating: 4.0

GRAINS

Markets were mostly firmer in overnight trading and are at or near multi-week highs. Grain market bulls are in the best technical postures they’ve been in for months. Bullish weekly and/or monthly high closes on Friday would be more bullish ammunition for the grain futures markets. Fledgling price uptrends are in place and the bulls have good near-term momentum to suggest the fledgling price uptrends can be sustained.