* Latest Market Developments *

In overnight news, the Bank of Japan announced it would keep its very easy monetary policy steady, despite a grim Japanese GDP report issued earlier in the week. The BOJ governor said the latest monetary policy easing moves implemented last month were the right path to take.

There was also more weak economic data coming out of the European Union Wednesday, as EU construction spending across the region declined 1.8% in September, year-on-year.

The big economic report of the day in the U.S. will be the minutes of the latest meeting of the Federal Open Market Committee (FOMC), due out in early afternoon. Fed meetings and minutes of those meetings have been markets-movers the past many months.

The themes in the market place continue to be the strong U.S. dollar against the other major currencies, weakening world economies (except the U.S.) and the specter of price deflation looming and becoming a serious worldwide economic ailment. These themes have been solidly bearish for the raw commodity sector as a major down cycle continues to play out in raw commodities. The bear markets in raw commodities and very low interest rates that make holding bonds unattractive have made the stock markets “the only game in town” for most investors. But keep this in mind: Just like the now mature down-cycle in raw commodities, the mature up-cycle in equities will reverse at some point down the road—and probably sooner that most expect.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, the weekly DOE liquid energy stocks report and the minutes from the last FOMC meeting.

(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)

Wyckoff’s Daily Risk Rating: 5.0 (Geopolitical risks have been moved to the back burner of the market place…for now. The still-simmering Russia-Ukraine conflict could be the next geopolitical hotspot to escalate.)

(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 March e-mini futures: Prices are near steady in early trading and hovering near Tuesday’s record high. 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 early today. Today, shorter-term technical resistance comes in at Tuesday’s high of 2,046.50 and then at 2,050.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Tuesday’s low of 2,028.50 and then at this week’s low of 2,018.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are slightly lower in early trading and hovering near Tuesday’s 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 early today. Shorter-term technical resistance is seen at Tuesday’s high of 4,246.00 and then at 4,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at Tuesday’s low of 4,210.00 and then at 4,200.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are near steady in early U.S. trading and hovering not far below Tuesday’s record high. Buy stops likely reside just above technical resistance at Tuesday’s high of 17,695 and then at 17,750. Sell stops likely reside just below technical support at 17,600 and then at this week’s low of 17,570. Shorter-term moving averages are still 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 neutral early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today. Bulls and bears are on a level near-term technical playing field amid recent choppy trading. Shorter-term moving averages (4- 9- 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. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at the overnight high of 140 12/32 and then at this week’s high of 140 26/32. Buy stops likely reside just above those levels. Shorter-term support lies at this week’s low of 139 23/32 and then at 139 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5 March U.S. T-Notes: Prices are lower in early trading. Bulls and bears are on a level near-term technical playing field. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is above 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 126.00.0 and then at this week’s high of 126.10.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 125.22.5 and then at 125.16.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly higher in early trading. Prices are still not far below last week’s contract and four-year high. Bulls 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 Tuesday’s high of 88.155 and then at this week’s high of 88.225. Shorter-term support is seen at Tuesday’s low of 87.760 and then at 87.640. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are near steady in early U.S. trading and hovering just above the recent four-year low. Bears remain in solid overall near-term technical control. Look for buy stops to reside just above technical resistance at $75.00 and then at $76.00. Look for sell stops just below technical support at the overnight low of $73.92 and then at the contract low of $73.22. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Grain futures markets were lower in overnight trading. The grain market bulls are fading a bit and working to keep price uptrends in place on the daily bar charts. I will be surprised if the grain markets can extend their recent rallies into the end of this year, given the bearish outside markets.