U.S. Stock Indexes See Mild Profit Taking Early Monday

* Latest Market Developments *

NOTE: I am out of the office all week this week. My friend and fellow market analyst Ken Seehusen will be producing my report today. Ken’s format and style is a bit different than mine, but I think you’ll enjoy and benefit from his work, too.

—Jim Wyckoff

U.S. STOCK INDEXES: The March NASDAQ 100 was lower due to light profit taking overnight as it consolidates recent gains. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off December’s low, November’s high crossing at 4342.00 is the next upside target. Closes below the 10-day moving average crossing at 4241.93 would confirm that a short-term top has been posted. First resistance is last Friday’s high crossing at 4322.00. Second resistance is November’s high crossing at 4342.00. First support is the 10-day moving average crossing at 4241.93. Second support is the 25% retracement level of the October-November-rally crossing at 4181.09.

The March S&P 500 was lower due to profit taking overnight as it consolidates some of the rally off December’s low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the aformentioned rally into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing at 2045.85 would confirm that a short-term top has been posted. First resistance is last Friday’s high crossing at 2088.50. Second resistance is unknown. First support is the 20-day moving average crossing at 2045.85. Second support is December’s low crossing at 1960.40.

INTEREST RATES: March T-bonds were higher due to short covering overnight as it consolidates some of the decline off December’s high. Stochastics and the RSI remain neutral to bearish signaling that additional weakness is possible near-term. If March extends the aforementioned decline, the 38% retracement level of the September-December-rally crossing at 141-25 is the next downside target. Closes above the 10-day moving average crossing at 144-05 would temper the near-term bearish outlook. First resistance is the 10-day moving average crossing at 144-05. Second resistance is December’s high crossing at 146-19. First support is the 38% retracement level of the September-December-rally crossing at 141-25. Second support is the 50% retracement level of the September-December-rally crossing at 140-10.

ENERGY MARKETS: February Nymex crude oil was slightly higher overnight as it extends the trading range of the past two-week’s. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If February resumes the decline off June’s high, monthly support crossing at 50.43 is the next downside target. Closes above the 20-day moving average crossing at 60.11 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 55.92. Second resistance is the 20-day moving average crossing at 60.11. First support is the reaction low crossing at 53.94. Second support is monthly support crossing at 50.43.

CURRENCIES: The March Dollar was slightly lower overnight as it consolidates some of this month’s rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the aforementioned rally, monthly resistance crossing at 92.53 is the next upside target. Closes below the 20-day moving average crossing at 89.29 would confirm that a short-term top has been posted. First resistance is last Wednesday’s high crossing at 90.40. Second resistance is monthly resistance crossing at 92.53. First support is the 20-day moving average crossing at 89.29. Second support is December’s low crossing at 87.83.

GRAINS: March corn was lower due to profit taking overnight while extending the trading range of the past two-weeks. The low-range close sets the stage for a steady to lower opening when the day session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low, the 50% retracement level of this year’s decline crossing at 4.26 3/4 is the next upside target. Closes below the 20-day moving average crossing at 4.01 1/2 are needed to confirm that a short-term top has been posted. First resistance is last Tuesday’s high crossing at 4.15 3/4. Second resistance is the 50% retracement level of this year’s decline crossing at 4.26 3/4. First support is the 20-day moving average crossing at 4.01 1/2. Second support is the reaction low crossing at 3.77 1/4.

March wheat was higher due to short covering overnight as it consolidated some of last week’s decline. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 6.11 1/2 are needed to confirm that a short-term top has been posted. If March renews the rally off September’s low, the 62% retracement level of the 2012-2014-decline crossing at 7.13 is the next upside target. First resistance is the 50% retracement level of the 2012-2014-decline crossing at 6.68 1/4. Second resistance is the 62% retracement level of the 2012-2014-decline crossing at 7.13. First support is the 20-day moving average crossing at 6.11 1/2. Second support is the reaction low crossing at 5.72 3/4.

January soybeans was higher overnight while extending the trading range of the past two months. The mid-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If January renews the rally off October’s low, the 50% retracement level of the 2013-2014-decline crossing at 11.14 1/4 is the next upside target. Closes below the reaction low crossing at 10.15 would open the door for additional weakness near-term. First resistance is November’s high crossing at 10.86 1/4. Second resistance is the 50% retracement level of the 2013-2014-decline crossing at 11.14 1/4. First support is the reaction low crossing at 10.15. Second support is December’s low crossing at 9.83 3/4.