* Latest Market Developments *

The market place Monday is quieter to start this holiday-shortened Christmas trading week. Many players are off this week, and activity will only grow quieter after Tuesday. The main U.S. economic report on tap this week will be the third-quarter gross domestic product report on Tuesday. GDP is expected to be up 4.3%, year-on-year, versus the previous reading of up 3.9%. Tuesday could be the busiest trading day of the week as there are also several other key U.S. economic reports due out.

European and Asian markets were quieter overnight. The feature in Europe was the Italian 10-year bond yield fell to a record low of 1.68%, reports said. Ironically, EU country bond yields are falling when anxiety about the health of the European Union is rising. A main reason for this paradox is that there are also heavy odds in favor of the European Central Bank initiating quantitative easing of its monetary policy next year. That prospect is leading investors to put their likely deflating Euros into even shaky EU governments’ debt.

The Russian ruble is stable Monday, following last week’s turmoil. Last week the ruble fell to 80 versus the U.S. dollar and was trading at 57 to the greenback on Monday.

Crude oil prices are also stable Monday following the big plunge in recent months that saw prices last week hit a five-year low. Saudi Arabia’s oil minister said in reports Monday that crude oil prices may never reach the $100 mark again.

U.S. economic data due for release Monday includes existing home sales and the Chicago Fed national activity index.

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

Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risk assessment has faded a bit, but risks have 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 higher and hovering near last week’s record high in early trading. Bulls have quickly the solid near-term technical advantage. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter-term technical resistance comes in at the last week’s record high of 2,076.25 and then at 2,085.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at the overnight low of 2,064.00 and then at Friday’s low of 2,056.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are higher in early trading as the bulls have regained good upside momentum. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is above the 9-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 Friday’s high of 4,304.00 and then at 4,325.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,283.00 and then at Friday’s low of 4,258.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0

Dow futures: Prices are firmer in early U.S. trading as the bulls have made a dramatic rebound from last week’s low. Buy stops likely reside just above technical resistance at Friday’s high of 17,830 and then at 17,900. Sell stops likely reside just below technical support at 17,761 and then at Friday’s low of 17,695. Shorter-term moving averages are neutral early today, as the 4-day moving average is above the 9-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: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are near steady early today. Bulls have faded a bit but still have the 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 neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 144 25/32 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: 5.0 March U.S. T-Notes: Prices are near steady in early trading. Bulls still have the slight overall near-term technical advantage but have faded. 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 neutral to bearish early today. Shorter-term resistance lies at the overnight high of 126.26.5 and then at 127.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at last week’s low of 126.09.0 and then at 126.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is lower in early trading, on profit taking after hitting a contract and four-year high overnight. Bulls still have the solid overall near-term technical advantage. Short-term oscillators for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight contract high of 89.950 and then at 90.000. Shorter-term support is seen at the overnight low of 89.580 and then at Friday’s low of 89.380. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

February Nymex crude oil prices are slightly lower in early U.S. trading. Prices are not far above last week’s five-year low. Bears remain in solid overall near-term technical control amid still no early clues of a market bottom being close at hand. Look for buy stops to reside just above technical resistance at $57.50 and then at the overnight high of $58.53. Look for sell stops just below technical support at $56.00 and then at $55.00. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Grain futures markets were mixed in overnight trading. Wheat is sporting gains and continues to be the upside leader. Corn and wheat market bulls have some upside near-term technical momentum heading into the end of the year, but soybeans are seeing choppy and sideways trading. Unless soybean prices perk up soon, I cannot see wheat and corn futures sustaining their uptrends.