* Latest Market Developments *

Traders and investors are still digesting Wednesday’s Federal Reserve Open Market Committee (FOMC) meeting and Fed chair Janet Yellen’s press conference. Many market watchers were confused in the immediate aftermath of FOMC statement, as the Fed left in the “considerable time” phrase, regarding when it might raise interest rates, but the statement also said the Fed would be “patient” in raising rates. Then during Yellen’s press conference it became somewhat clearer that the Fed will probably raise interest rates in 2015 but won’t be in a hurry to do so. The market place then began to deem the FOMC statement and Yellen’s remarks as more dovish than hawkish, and the stock market rallied sharply.

In overnight trading world stock markets followed the U.S. lead Wednesday and posted gains. Crude oil and gold prices also rallied, while the U.S. dollar index and U.S. Treasuries were weaker. So far early Thursday it’s a “risk-on” day in the markets.

The market place is still very closely watching the price movement of the Russian ruble. It dropped sharply earlier this week and hit a record low versus the U.S. dollar. The Russian central bank on Tuesday implemented a big interest rate increase from 10.5%, to 17%, to stop the slide in the ruble. On Wednesday, the ruble stabilized after Russian officials pledged to sell foreign currency reserves to defend the ruble. But on Thursday President Putin had harsh words for the West, which has sanctioned his country, and the ruble was again under pressure on the foreign exchange markets. There are still worries the deflating ruble could cause a secondary-currency contagion. 

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, the flash services PMI, and leading economic indicators.

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

Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risk assessment has faded a bit Thursday, but risks have certainly not evaporated.)

(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 solidly higher in early trading. Bulls are regaining upside momentum. The shorter-term moving averages (4-, 9- and 18-day) are still 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. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at the overnight high of 2,036.00 and then at 2,050.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,015.00 and then at the overnight low of 2,004.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0

Nasdaq index futures: Prices are solidly higher in early trading and the bulls are regaining upside momentum. Shorter-term moving averages (4- 9-and 18-day) are still bearish early today. The 4-day moving average is below the 9-day and 18-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at the overnight high of 4,222.00 and then at 4,250.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 4,200.00 and then at 4,175.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are solidly higher in early U.S. trading and seeing a big corrective rebound after hitting a six-week low on Tuesday. Buy stops likely reside just above technical resistance at 17,500 and then at 17,550. Sell stops likely reside just below technical support at 17,400 and then at 17,350. Shorter-term moving averages are still bearish early today, as the 4-day moving average is below 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: 6.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are lower early today on more profit taking after hitting a contract high Tuesday. Bulls still have the overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-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 144 16/32 and then at 145 even. Buy stops likely reside just above those levels. Shorter-term support lies at 144 even and then at 143 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.0 March U.S. T-Notes: Prices are lower in early trading and seeing profit taking after hitting a two-month high on Tuesday. Bulls still have the overall near-term technical advantage but are fading. Shorter-term moving averages (4- 9- 18-day) are still bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are bearish early today. Shorter-term resistance lies at 127.00.0 and then at the overnight high of 127.07.5. Buy stops likely reside just above those levels. Shorter-term technical support lies at 126.16.0 and then at 126.10.0. 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 slightly lower in early trading on a corrective pullback from solid gains seen Wednesday. Bulls have the firm overall near-term technical advantage. Short-term oscillators for the dollar index are neutral to bullish early today. The dollar index finds shorter-term technical resistance at the overnight high of 89.595 and then at the contract high of 89.785. Shorter-term support is seen at the overnight low of 89.120 and then at 89.000. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

January Nymex crude oil prices are higher in early U.S. trading and seeing short covering in a bear market. Bears remain in solid overall near-term technical control amid still no early clues of a market bottoming being close at hand. Look for buy stops to reside just above technical resistance at this week’s high of $58.98 and then at $60.00. Look for sell stops just below technical support at $57.00 and then at $56.00. Wyckoff’s Intra-Day Market Rating: 5.5

GRAINS

Grain futures markets were higher in overnight trading. The key “outside markets” are in a bullish posture early Thursday, as the U.S. dollar index is weaker and crude oil prices are higher. It’s also a “risk-on” day in the market place Thursday. Wheat is leading gains this week as the Russia worries make traders wonder about wheat exports coming out of the Black Sea region. Grain market bulls have some upside near-term technical momentum heading into the end of the year, but soybeans are the weak sister at present.