* LATEST MARKET DEVELOPMENTS *

It’s a relatively quiet start to the new trading week and the U.S. economic docket is light Monday. The shine of last week’s temporary U.S. fiscal cliff agreement by U.S. lawmakers has quickly faded. The market place is now looking forward with trepidation to the upcoming negotiations between the U.S. Congress and the Obama administration on budget and spending matters. Such is likely to limit trader and investor participation in many markets in the coming weeks. European stocks were weaker overnight in subdued dealings as traders there await Thursday’s monthly European Central Bank meeting. In Asia, the Australian stock market hit a 19-month high. Asian traders are awaiting a fresh batch of Chinese economic data due out next weekend. U.S. economic data due for release Monday includes the employment trends index.–Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are slightly lower in early trading today, on some chart consolidation after hitting a 2.5-month high late last week. Bulls still have some upside near-term technical momentum. The 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 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 last week’s high of 1,462.50 and then at the September high of 1,467.50. Buy stops likely reside just above those levels. Downside support for active traders today is located at 1,450.00 and then at 1,439.30. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 5.0

Nasdaq index futures: Prices are slightly higher early today. Bulls still have some upside near-term technical momentum. The 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 bearish early today. Shorter-term technical resistance is located at 2,725.00 and then at Friday’s high of 2,736.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 2,700.00 and then at 2,686.25. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

Dow futures: Prices are slightly lower early today on some chart consolidation from recent strong gains. Bulls still have some upside near-term technical momentum. Sell stops likely reside just below technical support at Friday’s low of 13,307 and then at 13,250. Buy stops likely reside just above technical resistance at Friday’s 2.5-month high of 13,370 and then at 13,400. Shorter-term moving averages are neutral 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 to bullish early today. Wyckoff’s Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are slightly higher early today on tepid short covering in a bear market. Prices Friday hit a 3.5-month low. Bears still have near-term downside technical momentum. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral early today. Shorter-term resistance lies at 145 even and then at 145 16/32. Buy stops likely reside just above those levels. Shorter-term technical support lies at 144 13/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0

March U.S. T-Notes: Prices are slightly higher early today on short covering after hitting a 2.5-month low on Friday. Bears still have downside momentum. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day
moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at the overnight high of 131.24.5 and then at 132.00.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at the overnight low of 131.16.5 and then at 131.08.0. 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 firmer in early U.S. trading. Bulls have gained good upside near-term technical momentum recently, to suggest a market bottom is in place and that prices can trade at least sideways in the coming weeks. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 80.80 and then at Friday’s high of 80.99. Shorter-term support is seen at the overnight low of 80.59 and then at 80.50. Wyckoff’s Intra Day Market Rating: 5.5

NYMEX CRUDE OIL

Crude oil prices are weaker early today on profit taking from recent gains. Prices last week hit a 2.5-month high. The stronger U.S. dollar is a negative for crude. In February Nymex crude, look for buy stops to reside just above resistance at the overnight high of $93.25 and then at last week’s high of $93.87. Look for sell stops just below technical support at $92.00 and then at $91.52. Wyckoff’s Intra-Day Market Rating: 4.5

GRAINS

Markets were higher overnight on short covering following recent selling pressure. Traders are awaiting Friday’s monthly USDA supply and demand report. This particular USDA report will be more important than most monthly reports.The near-term technical postures of the grain markets remains bearish at present.