* Latest Market Developments *

Arguably the most important U.S. economic report of the month is released Friday: the Labor Department’s employment situation report. Forecasts call for the important non-farm payrolls growth to be up 220,000 in August. The overall unemployment rate is expected to have declined slightly in August. If the report meets expectations, it would be considered upbeat for the U.S. economy.

Thursday’s move by the European Central Bank to reduce its already extremely low interest rate and also the initiation of quantitative easing sunk the Euro currency to a 13-month low. Meantime, growing ideas the U.S. Federal Reserve will continue to wind down its QE and even start to raise interest rates as early as the first quarter of 2015 have boosted the U.S. dollar index to a 13-month high. Given this day and age of interconnected world economies and markets, it’s unusual to see two major central banks moving their monetary policies in the opposite direction.

In overnight news, the European Union’s second-quarter gross domestic product report showed a growth rate of 0.0% from the first quarter, and up 0.7% year-on-year, which was in line with expectations and continues a theme of downbeat economic data coming out of the world’s third-largest economy.

On the geopolitical front there have been no major, markets-moving developments this week. The Russia-Ukraine stand-off continues to be closely monitored for any escalation.A cease-fire may or may not be in place. Sanctions against Russia are still being threatened from the U.S. and European Union. The U.S. and U.K. continue to ratchet up their defensive postures against the ISIS terrorists in the Middle East.

Wyckoff’s Daily Risk Rating: 6.0 (The market place this week is less focused on the tensions between Russia and Ukraine, and on other world hot spots. But I look for that trader and investor antipathy to change, and sooner rather than later.)

(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 weaker in early trading, on profit taking. The shorter-term moving averages (4-, 9- and 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. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 1,991.25 and then at the record high of 2,002.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,970.00 and then at 1,960.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5

Nasdaq index futures: Prices are weaker in early trading today on profit taking. Bulls are in firm technical command. 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 average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at 4,085.00 and then at this week’s high of 4,105.50. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 4,056.50 and then at 4,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

Dow futures: Prices are weaker in early U.S. trading on profit taking. Buy stops likely reside just above technical resistance at 17,079 and then at 17,100. Sell stops likely reside just below technical support at 17,000 and then at 16,950. 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 above the 18-day moving average. Shorter-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. TREASURY BONDS AND NOTES

December U.S. T-Bonds: Prices are near steady early today. Bulls have faded a bit this week 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 and 18-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 138 13/32 and then at 139 even. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 137 28/32 and then at 137 16/32. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

December U.S. T-Notes: Prices are weaker in early trading as the bulls are fading a bit this week. Bulls still have the overall near-term technical advantage. 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 the overnight high of 125.01.0 and then at 125.08.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 124.27.0 and then at this week’s low of 124.24.5. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The December U.S. dollar index is slightly lower in early trading, on mild profit taking after hitting a contract high overnight. Bulls still have the firm overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight contract high of 84.080 and then at 83.250. Shorter-term support is seen at 83.500 and then at 83.190. Wyckoff’s Intra Day Market Rating: 4.5

NYMEX CRUDE OIL

October Nymex crude oil prices are near steady in early U.S. trading. Bears still have the overall near-term technical advantage as prices are in a nine-week-old downtrend on the daily bar chart. Look for buy stops to reside just above resistance at $95.00 and then at $95.50. Look for sell stops just below technical support at $94.00 and then at $93.50. Wyckoff’s Intra-Day Market Rating: 5.0

GRAINS

Markets were mostly firmer in overnight trading, on tepid short covering. Grain market bears are still in full technical command. Prices this week have fallen to new contract lows, which negated the basing patterns on the daily charts and suggest a fresh leg down in prices in the near term. U.S. corn and soybean harvest is set to begin, in earnest, the next few weeks.